By Shari Finnell, writer/editor Charitable Advisors
When Bryan Orander launched Not-for-Profit News in 2001, the internet had not yet reached its saturation point; only 52 percent of American adults reported using it at the time, according to the Pew Research Center. And Orander considered the e-newsletter as nothing more than a project to keep him busy while starting his consulting business, perhaps a tool that would help a few people find jobs, he recently said.
As NFPN celebrates its 20th anniversary year as an online weekly publication with more than 14,000 subscribers, Orander reflected on how the nonprofit sector of Central Indiana has navigated various changes during that period, including internet saturation, the economic recession of 2008, technology advances, evolving giving patterns, and, currently, the impact of a global pandemic and unprecedented racial equity protests.
Orander, founder and President of Charitable Advisors, a consulting firm, said no other period in the past 20 years fully matches the challenges faced by nonprofits today, but there were similarities during the economic downturn of 2008.
“From our vantage point — from 2008 to 2010, we saw job ads drop off, donations being directed to basic needs and away from the arts and the environment,” he said. “We’re now seeing a lot of the same things. Right now, at least, COVID-19 relief funds are being directed to human services and basic needs. That makes sense.”
Studies reveal that many nonprofits weathered the 2008 recession fairly well, Orander said, which gives him reason to hope that many of them will survive the current turbulent period. Here are some of Orander’s perspectives on the trends that continue to shape the nonprofit sector in Central Indiana.
Increasing dominance of the larger nonprofit: Orander said some of the same patterns that have dominated the B2B sector, including the decline of small businesses, seem to be playing out in the nonprofit sector.
“Looking at the bigger picture over the past 20 years, it appears that the nonprofit sector has evolved with more clearly defined, substantial nonprofits. It’s almost a case of the-haves and the have-nots,” he said. “The organizations that are able to hire the best people, invest in advanced technology and implement the best techniques are getting better and better at raising money and attracting donors. Meanwhile, a lot of other nonprofits are being left behind. And that gap is getting bigger.”
Changing profile of donors: Citing a 2019 report published by the Indiana University Lilly Family School of Philanthropy at IUPUI, Orander noted that the number of people donating has decreased from two-thirds of U.S. households in 2000 to slightly over half in 2016. “While overall charitable donations continue to slowly increase, the number of people donating is decreasing. We have a donating class and the rest,” he said. “People with less means are giving less, while people of means are taking over a bigger share of the giving.”
While overall giving hasn’t declined, Orander said, nonprofits need to be more strategic about how to target wealthier donors. “You have to be sophisticated at soliciting donations, and that seems to leave smaller nonprofits in a tough position because most have not developed major donors.”
Models of charitable giving are evolving: During the past 20 years, Orander also has noticed changes in the giving model — with some donors moving from a focus on organizations that align with their values to a model that generally focuses on a donor’s loyalty to a cause. “There are continuing studies on this, but it appears that charity and cause in terms of giving are viewed differently among different generations,” Orander said.
For example, he said, younger people are more likely to be loyal to a cause, such as environmental concerns, while older people tend to support nonprofit organizations that align with their passions and beliefs. Since younger generations may be more passionate about a specific cause, they may decide to give through an engaging online campaign or work for a for-profit employer that is dedicated to their cause.
Crowdfunding also has changed the charitable giving model, Orander said. “There are so many ways that people can give online; there’s now a fuzziness between charity and giving. A lot of people don’t discern the difference between giving to a food bank or to a worthy person through an on-line crowdfunding platform.”
Businesses competing with nonprofits for new hires: As a professional recruiter, Orander also has some perspectives about how hiring trends are impacting nonprofits’ ability to compete for talent.
“A positive trend is that the younger generation wants to be involved in a worthy cause. They want to make a difference, so they would traditionally be more likely attracted to nonprofits,” Orander said. “However, for-profit businesses have realized that their prospective employees want to be part of a making a difference, so they often affiliate themselves with a cause.”
Socially responsible companies have become so mainstream, that “the lines are kind of blurry between working at a nonprofit with a cause or a for-profit that has a cause,” Orander said. “Employees may determine that, either way, it’s possible for you to make a positive difference. But with some employers, you can make more money and still make a difference.”
Impact of starting a new nonprofit: While it’s not impossible, it is much more difficult to start a nonprofit with real impact than it was 20 years — even without the challenges presented by the COVID-19 pandemic, Orander said. “It may not be difficult to create one, but it’s harder and harder to rally the people and the resources to do anything with it,” he said. Many new nonprofits are created in response to a personal or family tragedy or loss and not because the community doesn’t already offer those services, Orander has observed.
The Future: As Orander looks forward to continuing NFPN’s role in the Central Indiana nonprofit sector, he foresees developing more opportunities to connect people, organizations and resources, with a focus on informing and inspiring through the news and stories it delivers.
“When we first surpassed 10,000 subscribers, I knew we were really helping to connect and inform people in the local nonprofit community. We had become the go-to place for jobs and news,” Orander said. “It felt like we were making a difference. I feel the same way now. It’s been an interesting and humbling experience.”
Last year, nearly 10,500 adults were released from Indiana Department of Correction’s custody. In Marion County alone, 2,485 adults, of which 203 were females, rejoined the community.
While some find programs that help with their re-entry, other former inmates struggle. According to research, however, adults who find immediate, comprehensive support that focuses on transitioning ex-offenders back into society, have dramatic reduced rates of recidivism.
In Marion County, the Re-entry Coalition run by Community Solutions provides a connection and network for county re-entry programs. Lena Hackett, president and founder of Community Solutions, a community development consulting firm, has worked with well-established nonprofits that do this type of work, but has seen start-ups get in the game in the past several years. The coalition convenes monthly working groups and a two-part, large-group quarterly meeting that opens with work groups sharing results, and then sharing information and providing education.
“I know that there are people who have different beliefs or different values, but we’re still all working, using our resources, our networks, to say, ‘How do we make this change?’ It’s pretty exciting,” said Elizabeth (Liz) Wallin, founder of Project Lia, which supports women exiting the correctional system.
Wallin is one of several founders of start-up efforts. Ericka Sanders works with dads inside Putnamville Correctional Facility and founded YouYesYou! to keep dads and daughters connected. Nick Greven is interim director of FOCUS Initiatives, which began as a correspondence project in Bloomington and is just getting started in Indianapolis. His group, which is not yet a part of the Marion County Re-entry Coalition, will provide former inmates with a range of services and eventually will be run by the four inmates instrumental in getting the program off the ground. All believe in the importance of building trust.
Project Lia
Wallin, who grew up in Queens, New York, came to Indianapolis in 2016 for an internship at Mundell and Associates. Her quest was to learn about the Irvington company’s profit-sharing model. As a member of the Economy of Communion network, the environmental company divides its profits in thirds, a portion going to the community, a portion back into the business and the remainder to a general global fund. During her time in Indianapolis, she also volunteered with a group involved in a mosquito netting project at the Indiana Women’s Prison.
As a result of that connection, she started doing research into the root causes of female incarceration. She also started mapping the re-entry programs available in Indianapolis for women.
“I was very much looking at it like an analysis and trying to dig for data (to determine) would that be a sustainable project to take outside of the prison walls, so that when individuals return to the community, they would have that skill set and could plug right in as they gained some sort of stability. I was looking at it purely in a data-driven way.”
And that’s when the idea of Project Lia developed, said Wallin, founder and executive director. When her internship finished, Wallin stayed in the city, and with some of Economy of Communion funding, jumpstarted the program which is named for an Argentinian woman who dedicated her life to building bridges between races, cultures and religions.
Just under 10 percent of America’s prisoners are women. While men and women returning face some common challenges, some other barriers vary by gender. Women are statistically more likely to be expected to care for children or other family members. The basic premise is to help women rebuild their lives after incarceration.
The program’s length is designed to be six months to a year. As advancements are made through technical skills and the life skills program, job titles and pay can also advance. The goal is to make a successful transition to a long-term career opportunity. Along the way, program participants receive instruction in financial literacy, communication, business ethics, and health and wellness, and receive support for a future job search. As part of the process of rebuilding their lives, the women reuse discarded materials to design and build furniture and other items that contribute to the nonprofit’s revenues.
Word of the program is shared at the Women’s Prison, and last fall, “New America” produced a piece for the Atlantic that shared its mission and plans for scaling.
“It’s a pretty exciting moment. I think it also helps us in building our credibility as an organization and the work that we do. Because many times, it’s a hard sell — that very emotional, relational work that happens in community organizing and community development,” said Wallin.
“We’re creating taxpaying individuals, productive individuals, but that work only is sustained through relationships. It only really changes a long-term impact if you build those relationships and invest in the other. And that story’s hard to sell because it can be expensive and it’s messy. It doesn’t look like what you want it to look like, it looks like what it looks like.”
Besides funding from Economy of Communion, the nonprofit has received funding from the Plus Program, and is working with the Department of Correction to determine if a grant is feasible. Revenue from products and projects has been another source of income.
Just before the shelter-in-place order, Timesia Keys was hired as the full-time operations manager. During the pandemic, Wallin said it has not added any participants to the program, but applied for and received assistance from the Paycheck Protection Program through LISC and its landlord has provided some rent relief.
Some of the ways Wallin said the program measures success is to look at savings and checking accounts and financial management before and after the program.
“The career pathway we take is on a very individual basis. It’s like: ‘Where do you want to go? What do you want to be doing?’ and then we work on that,” Wallin said. Wallin also tries to connect women to community resources.
Joyce (using only her first name here) has been in the program for about six months and found it through PACE. Besides upholstering, she’s learned to fix windows, since a revenue generator for Project Lia is repairing all the transom windows in the Circle City Industrial Complex where the program is housed. But at her core, Joyce is a true leader. She is hungry for knowledge about the administrative side of a nonprofit, because she wants to start a transitional home for former women inmates.
Wallin said the program’s first employee is now a manager at a Bloomington beauty salon and has just purchased her first house.
“It’s exciting to be part of her life. She was at that point in the program helping us, more than we were helping her, it felt like. Love her story.”
But at the core, Wallin, who has grown up with people investing in her development, believes it is about social justice.
“I believe strongly in our ability to create a united world and peaceful communities. In loving the other, it is hard and simple at the same time — simple concept, radical implementation. So that’s sort of what’s my guiding post and how do we fight for equity for all,” she said.
Project Lia
WHO SERVED: Women over 18 who have been incarcerated.
WHAT: Social enterprise, started in 2017, working to address economic barriers to re-entry success. Participants develop workforce skills by repurposing discarded material into furnishings and accessories. Participants are paid $10 an hour to start, and after a three-month evaluation, earn $11, and eventually top at $12, and get help opening savings and checking accounts. The John Boner Neighborhood Center offers participants financial literacy and management support.
PROGRAM GOAL: Help women become self-sufficient, build a resume and. According to Project Lia’s mission statement: “We exemplify an inclusive local economy and ultimately help our participants become self-sufficient and valued members of society. We aim to create a space of understanding and mutual respect – a space where transforming material, transforms lives. Using excess materials growing the business and organization step-by-step.”
LOCATION: 1125 Brookside Avenue, Suite C1, Indianapolis, IN 46202.
Before Covid-19, purchasing items designed and made by the women were available in a small shop onsite during the week, and at area farmers’ markets and festivals. In the interim, online shopping is available.
COMMUNITY INVOLVEMENT: Volunteers have shared skills, like woodworking and sewing, donated building materials like lumber, tools and fabric and glass jars.
Every year, Ericka Sanders and her husband start their year setting goals. But 2014 was different. That year, she decided this would be her year to “to do something.”
A friend read a story about a father-daughter dance at a Virginia prison. That project idea didn’t go away. Sanders had grown up without her father actively in her life and was driven by a desire to help daughters have an experience that she didn’t have. She decided that a father-daughter dance could be her “do something.” According to a 2017 Incarceration to Reentry study in Indiana, 70 percent of people coming out of prison are parents, and the collateral consequences are often intergenerational.
By November, she had pulled together a first event at the Indianapolis Re-Entry Educational Facility on the Near Eastside. At that dance, 26 estranged fathers got the chance to reconnect with 37 daughters, as young as 2 and as old as 29.
By 2016, Sanders established a nonprofit, YouYesYou!, and began building relationships between incarcerated fathers and their daughters, which now includes programming inside prison facilities. A former Indianapolis Recorder reporter, now working full time for Simon Property Group, she has found the time to grow the program beyond the dance.
Besides the father-daughter annual dance, there are Halloween parties for families and their dads, monthly book clubs and workshops designed for the incarcerated fathers that introduce them to organizations focused on re-entry, rehabilitation and other activities. Additionally, on the outside, families build relationships by attending events like basketball games.
Those monthly Saturday book clubs allow time for the dads to talk and learn to build relationships with each other. She arrives with three or four questions about the book and inspirations that can be drawn from the text and asks if the inmates see themselves in the book’s characters.
“A lot of the times, the stories that we read are stories of triumph. Stories of people who have been dealt the most terrible hand but somehow, some way, they made it through. We talk a lot about the future and about dreaming. They don’t like to think much about that. But I kind of force them to do that because it’s important,” Sanders said.
But mostly she said, they just talk and learn a lot about each other.
“They’re pretty vulnerable at this point. By the time they’re in book club, they know me and they trust me. We know what each other is going through, so when we’re reading these books, we’re drawing from all of those different things.”
Sanders also encourages participants to thank whoever is taking care of their kids while the participants are incarcerated and to advocate for each other. Many guys, she said, are so much closer and are friends who hold each other accountable to stay out of trouble.
“The fathers in my program have made terrible, terrible decisions, multiple, multiple times. But they are human beings, and they are people, and sometimes if you just sit and you listen to their stories and you listen to their life and the brokenness that they come from and the things that they’ve had to deal with, you can kind of understand why they made some of the terrible decisions that they made.
“I really think that connecting them with their kids is the push that they need to be on good behavior and the push that they need that when they’re released, they will not come back. That is the basis of what we do.”
“A YouYesYou! father who getting out of prison has confidence, they believe in themselves. They’ve healed some relationships. They’re just different people. I hear that all the time. Basically, it’s just believing in them. It is so important that I get across that what we do is that we just believe in them,” Sanders said.
Earlier this year, she received a $50,000 United Way’s Innovation Award and is using part of the funds to hire a consultant to strengthen and grow her board. Plans are also underway to grow the program with the addition of the program at Plainfield, but the Department of Correction requires programs to be similar. So Sanders started her year honing the activity specifics, re-entry organizations’ workshops and the book club. Christamore House has plans to add a re-entry program, and YouYesYou! will collaborate and handle the family-engagement workshops to keep families of incarcerated engaged and connected.
She is still in communication with the Plainfield facility and Christamore House, but with the pandemic, expansion plans are on hold. The time has afforded her the opportunity to recruit a three-member working board which is scouting for additional members, and fine-tuning the program’s syllabus.
“Families of incarceration are often forgotten about. I think often people don’t realize the impact that incarceration has on families. What I’ve found, just the communication that the kids have with their dads, it helps the family all the way around,” Sanders said.
In five years, she sees the program expanding to more facilities and doing more family engagement activities in community centers.
“(The key is) to be able to just keep those families connected,” Sanders said. “The easy part is being in jail, if you want to be real about it. You know some guys are terrified to come out of prison. I would love to be able to share my blueprint with other individuals in Indiana and with other prison facilities and other states. It doesn’t have to be me running this program, it can be done anywhere, everywhere.”
She doesn’t want anything in return, she just wants them to be great dads. “Because by being a great dad, you’re not only helping yourself and your kids, but you’re helping their future.”
YouYesYou!
WHO SERVED: Fathers at Putnamville Correctional Facility, a medium security correctional facility. First father-daughter dance in 2014. Started at Putnamville in 2018 with 20 dads and ended up with 10; in 2019, 23 dads in the program, ended up with 21; and in 2020, the prison had 225 applications and selected 30. Those 30 are still involved. To date, eight have been released from prison and have not returned.
WHAT: Two-year project. Features workshops provided by re-entry organizations, like PACE, Recycle Force, EmployIndy, Goodwill’s New Beginnings and CareSource, which provide connections on the outside to employment and services. Fun activities with kids – father-daughter dance, Halloween party for daughters and sons and a family back-to-school event in August to maintain connections to family. A monthly book club that begins in November. When the program wraps up, the majority of dads are either out or on their way out when the program wraps up.
PROGRAM GOAL: To support the relationships between incarcerated fathers and their children by offering fun and engaging programs inside prison walls.
LOCATION: Putnamville Correctional Facility, 1946 W. U.S. Hwy 40, Greencastle, IN
Nick Greven has had firsthand experience with prisoners who struggle outside prison walls. His involvement started five years ago when he helped start IDOC-Watch. It’s a watchdog group that corresponds with inmates, particularly those who have been incarcerated for lengthy periods of time. While IDOC-Watch started in Bloomington, it now has about 50 people involved in chapters in Indianapolis, Gary, South Bend, Evansville and Fort Wayne.
Through contact, the group came to a greater understanding of incarcerated life and potential need for increased support. And what it also learned was that for individuals who have been incarcerated for decades, there are enormous challenges to reacclimate to life outside prison walls. Often, they have lost contact with their prior support systems, particularly if they were incarcerated at a young age. For those with little experience outside of prison, navigating the world is new and finding stable housing and employment are among their significant hurdles.
The urgency of creating FOCUS Initiatives became clear when Faheem Shabazz (formerly Jerry Smith), incarcerated as a teen, was released from prison in 2018, and efforts were made to help him navigate the hardships of re-entry. He had been corresponding with IDOC-Watch.
“I was trying to help him get on his feet,” Greven said. “He was locked up in adult prisons when he was 14, and been in prison for 20 years, actually growing up in prison. He was ill.
“It was just really hard for him to get on his feet. Impossible to find a place to rent and was really hard to find a job. Unable to find consistent work, he was staying with his mom, and it wasn’t going well. He just didn’t really know how to exist in the world.”
What he needed, the group realized, was sustainable support until he got to a position where he could take care of himself. This experience to help Shabazz resulted in FOCUS Initiatives that was designed by a team of current and former incarcerated individuals in collaboration with community allies. Not created in isolation, it drew on models like San Francisco-based Planting Justice and a Los Angles program for women, A New Way of Life. FOCUS Initiatives launched in 2019, and stands for Forever on Course United in Solidarity.
Shabazz is currently incarcerated on a technical parole violation at Westville Correction Facility in Westville, Indiana. Greven’s hope was that he would be more involved if he was released in March, but parole was denied.
“He’s been involved to the extent that he’s able to while incarcerated, but it’s pretty difficult. Anything that is time sensitive or detailed is pretty challenging,” said Greven, who is serving as interim director until the men are released from DOC custody.
“I’m the interim director until people are ready to take it over fiscally. We have people who are planning on doing that and get on their feet. Four people who are close collaborators on the project are getting out (of prison) between now and June,” said Greven.
“They have like some time to adjust, get their feet under themselves. A period of months to get used to be in a world outside of prison before there’s any financial pressures. The first step is getting people what they need to survive without having to be under a lot of stress when they first get out. And then also having a supportive community, especially of people who have been or had similar experiences around them to where they can consult with each other about what they are going through. There’s all kinds of PTSD and prison has all kinds of psychological effects. People who have not been in prison cannot understand how it affects someone,” said Greven.
The first phase is to buy a house that will be available for two to five former inmates. The house will have a group counseling space with a re-entry circle. It can also host formerly incarcerated or family members for get-togethers. It will be a place for several to live and work to organize the rest of the program. The group has been looking at the Eastside, east of Rural Street, to find affordable property that meets the program needs. The group has plans to start a business in the second phase.
“They’re going to establish a prototype or test run for the project to see what we need. It’s long term, and we’re trying to do it in a way so that we’re not dependent on big grants, so it’s an independent organization,” said Greven.
FOCUS Initiatives
WHO SERVED: Individuals returning to Marion County/Indianapolis from prison.
WHAT: Four-phase project that takes into account the underlying or “root” causes of mass incarceration.
PROGRAM GOAL: Launched in 2018 by a group of community allies and incarcerated individuals to build a Marion County community for former inmates. Plan is to include counseling services, a business, a legal clinic and medical services.
LOCATION: Seeking to purchase a house for two to five former inmates on the Eastside of Indianapolis.
By Leslie Wells, assistant director of communications, O’Neill School at IUPUI
As two teenage girls stood before the Batesville, Indiana, City Council, they waited to make their case for funding. The Batesville Mayor’s Youth Council had received $5,000 through the Indiana Housing and Community Development Authority’s (ICHDA) My Community, My Vision grant program (MCMV). If they couldn’t come up with another $7,000, they’d have to take their public art project back to the drawing board.
In the crowd at the council meeting was Stacy Robinson, a public affairs graduate student from the O’Neill School at IUPUI. She had been working with the Mayor’s Youth Council for months through her My Community, My Vision Fellowship at the O’Neill School. Her assignment: to help the teens develop a proposal that would bring national artist Kelsey Montague to Batesville to paint two interactive murals.
“The meeting actually was a little tense,” Robinson recalls. “Some of the city councilors didn’t like their idea.”
Former Indiana Lieutenant Governor Sue Ellspermann started MCMV in 2014 to bring development to Indiana communities and engage young people. Every year, youth-led organizations from across the state apply to the program. Each group selected receives a $5,000 grant toward a community development project. They are also paired with an O’Neill IUPUI graduate student who guides them through the process. As part of the fellowship, each grad student receives $10,000 over the course of two semesters.
Wolley and O’Neill Associate Professor Adam Eckerd helped create the partnership with ICHDA and bring the MCMV grant program fellowship to the school.
“Students come into an MPA program eager to foster policy change and make communities better, but they don’t often get the opportunity to see that change actually happen,” says Eckerd. “The My Community, My Vision program allows our grad students to get hands-on experience using what they’re learning to lead real positive change in Indiana communities, while also having an influence on high school students who will be future public leaders.”
That combination is why Robinson applied for the fellowship. She came to the O’Neill School because of its reputation in the nonprofit world. Yet experiences like this one help her learn how to apply her education to any sector.
“I liked the idea of learning more about how local government works while working with youth,” said Robinson. “They’re at an interesting time in their lives when they care so much about what’s happening around them, but they often aren’t given opportunities to make change happen.”
Once she was paired with the Mayor’s Youth Council, Robinson sat down with the teens to get a better understanding of what they wanted to do and why.
“They already had community surveys that told them there wasn’t a lot for young people to do,” she says. “They wanted to make Batesville feel like a more vibrant place that young people would want to come back to after graduation.”
Robinson taught the enthusiastic teens to think critically about how to turn their artistic dreams into reality. She worked with them on how to evaluate the project and get more feedback from their neighbors. That community buy-in, Robinson told them, was critical.
“If the community doesn’t like an idea selected by a small group of people, that’s not a good public art project,” she said. “You need to make sure the community is on board with it.”
Not only did the community support the project, but so did the city council. At the meeting, they agreed to cover the remaining costs and move the Youth Council’s plan from paper to paint. Since last summer, two murals now enhance downtown. The first is a tree swing painted on Miss Shannon’s Music Studio in the Batesville Shopping Village. The second, a butterfly mural, is on Hillrom’s Training Center on Walnut Street.
Kim Linkel, an advisor for the Youth Council, says Robinson’s guidance not only made the project better but also helped the teens develop leadership skills.
“Stacy always allowed them to drive the project,” Linkel says. “They’ve realized that they’re not just some club that doesn’t make an impact. They see that, even though they’re young, they can drive change in their community.”
Their newfound confidence came through in the City Council meeting. The teens presented a strong case and convinced councilors to provide additional funding to cover the remaining cost for the murals.
The My Community, My Vision partnership paid off for Batesville, its Mayor’s Youth Council members, and for Robinson.
“It was a really positive experience,” she says. “It was great to actually be able to put things into action that we learned in the classroom and I enjoyed working with the youth. They made me feel excited and hopeful about the future.”
Leslie Wells joined the O’Neill School at IUPUI as its assistant director of communications in 2018. She previously spent more than a decade in broadcast news and three years as media relations manager at the Indiana Youth Institute.
By Abby Rolland,
communications project manager at the Lilly Family School of Philanthropy
For more than a
decade, the Women’s Philanthropy Institute (WPI) has conducted research to answer this
question. Known for its studies that specifically focus on gender and giving, the
institute doesn’t just report on the findings, but incorporates practical
perspectives and applications in every study it conducts.
When Jeannie Sager joined WPI as director early this year, she was especially drawn to WPI’s mission to curate and disseminate research.
“Sager will be a dynamic new director guiding the next phase of our
Women’s Philanthropy Institute, which is helping to understand the full
potential of women in philanthropy and the potential of women’s philanthropy to
transform the world,” said Amir Pasic, Ph.D., the Eugene R. Tempel Dean of the
school. “Her experience working with women philanthropists as donors and
volunteers will further inform the institute’s work, and her strategic,
creative leadership style will help launch a new decade of excellence for WPI.”
An established
leader in philanthropy and fundraising, Sager brings a wealth of expertise and
more than 25 years of nonprofit leadership and development experience in a
variety of fields, including higher education, independent schools and
healthcare.
At the Indiana
University Health Foundation, she was part of the leadership team that created
a flagship statewide foundation from several disparate hospital foundations
that collectively exceeded its first-year fundraising goal by more than 330%.
Sager also
built a full-scale development program from the ground up at University High
School of Indiana, raising over $30 million in private philanthropic support by
establishing a major gifts program focused on annual gifts.
She believes
nonprofits must form deeper relationships with donors by creating community,
establishing personal connections with potential donors, encouraging longevity
and donor education and inspiring deeper engagement. Nonprofit practitioners,
she said, should incorporate easy-to-understand research findings into their
daily work as they help donors — women and men — discover their passions and
reasons for giving.
She recently
shared two donor anecdotes from her firsthand experiences that illustrate how
WPI research can be embedded into practitioners’ daily experiences and help
inform donor strategy.
“I worked with a woman on her first ever
“major” gift. It was the largest personal gift that she ever made. She was
inspired to make this gift as an opportunity to give back to her department in
honor of two physicians whom she felt invested in her at the beginning of her
career. So, she wanted to create a staff education fund to help other team
members have the opportunity for professional development to hopefully inspire
them to choose that area of healthcare as their specialty.
“She was very adamant about the idea of an
endowment and having these funds available in perpetuity and not subject to
budget constraints. Moreover, she was resolute about finding others to match her
gift and to achieve a goal of $100,000. She was willing to personally
solicit her network of colleagues, both retired and current employees, her
family and grateful patients.”
APPLICATION: Consider the various ways that
women donors engage with each other in giving.
Women also appear particularly interested and involved in collaborative giving, especially compared
to men. The donor in the story personally solicited her own network for
donations to the staff education fund, illustrating her desire to engage others
and give collaboratively to set up the fund.
Leveraging and maximizing dollars for greater
impact can be seen in the growth of giving circles. From 2007 to 2016, the number of giving circles tripled, with women making up the majority of members
in 70% of giving circles. It’s estimated that giving circles have given as much
as $1.29 billion since inception to 2016.
Women also report needing first-hand
involvement to increase their motivations for giving. The donor above felt a
strong connection to the department that she dedicated her career to, and
wanted to help support other nurses and staff long-term.
According
to the report “Where Do Men and Women Give?”
female-deciding
households are more likely to give to health (like the woman above), youth and
family, and international causes. In couples when the wife is the sole
decision-maker, the household is more likely to be motivated to give by
believing that their gift will make a difference.
“When
working in the independent school space, we often engaged in discussions with
spouses or adult children about considering a gift to the school that honored
and equaled the time and talent that their spouse or mother had invested in the
school — imagine hundreds of hours serving as PTO president, working open
houses, organizing fundraisers and working concession stands, etc.
“Reframing
their spouse’s or mother’s time in terms of value helped elevate a major gift
conversation.
“Women
philanthropists tend to give more than money. In addition to being more likely
to donate than men, they also are more likely to volunteer — and volunteer
more hours on average — compared to men. In other words, women give of their
time and talent, for example as PTO presidents, board members, and fundraising
committee members, in addition to giving their treasure.”
APPLICATION: When approaching a woman donor or
those close to her, consider the time, talent, treasure, and testimony she has
given your organization.
Women tend to engage philanthropically beyond
giving money. Fundraisers should keep in mind that
potential women donors may desire a
deep and first-hand connection to the causes that they care about. Women donors
may require a deeper level of engagement from the organizations to which they
donate — from serving as a volunteer or a board member, to requesting frequent
communication and updates about their donation.
Women’s
monetary donations are important, but keep in mind the many other ways women
show their generosity. They volunteer, and they use their networks and their
voices to galvanize further support for causes they care about. In an estimate of informal giving over the last 10 years, 72% of Americans said
they helped a stranger, and 42% said that they volunteered. Women are also more likely to volunteer than
men. As a result,
there’s large potential to engage potential donors, including the woman herself
as well as her family members, by illustrating the impact that she’s had on the
organization.
The bottom-line is as development professionals, think about the last few times that you interacted with women donors. If you can’t think of those interactions, why not? If you’re speaking to only men donors, who or where are the women in their lives that might be involved in those giving decisions? Why are they important to include? Take the time to analyze and evaluate your donor solicitations, and think of how including women will help your fundraising grow.
Abby Rolland serves as the communications project manager at the Lilly Family School of Philanthropy, and is also working towards a master’s degree in philanthropic studies. She holds a bachelor’s degree in history from Gettysburg College.
Jodi Snell grew up in a small town. Under 20,000 people live in Jacksonville, Illinois, but Snell remembers her parents were always busy helping to make their tiny community a better place.
Like organizing a softball tournament to raise money for a young cancer patient and her family. Snell recalls personally delivering a Game Boy to the girl in the hospital and recalling that garidathe joy was clearly two-fold: on the girl’s part and hers.
Amanda Lopez had similar experiences in her hometown of Wabash, Indiana. Her mom and dad over the years were foster parents to more than 100 children.
In each case the message is the same. For those who do it, community work can be a rewarding. Most volunteers say it is time well spent and personally fulfilling, even if they can’t be sure they made a significance difference.
In the nonprofit world, where organizations depend on donations and grants, it’s a different story. Nonprofits must prove their worth to keep the operating cash flowing.
And how exactly do they do that? With a little help from folks like Snell and Lopez whose vocabularies these days are full of somewhat dry words as program evaluation, data collection, logic model, outputs and outcomes.
Lopez is the president and founder of Wabash-based Transform Consulting Company. She learned the importance of evaluating programs from her days at Purdue University. She was a member of a service-learning project team whose goal was to interest third graders in engineering and science. But without a tool to measure success, it was hard to know if the kids were really coming on board.
As the only non-engineering student in the group, Lopez had a double role: to ensure that activities were developmentally appropriate and to execute short- and long-term evaluations to provide data.
“That really opened my eyes up to evaluation and the opportunity there,” Lopez said.
“When I went to grad school, I focused on systems and evaluations. (How can we) collect the right data that tracks and reports the impact that (nonprofits are) having or gives them the data that they need to improve and strengthen,” she said. After a stint in the government and coastal agencies, in 2008, she returned to Indiana and formed her consulting company to help nonprofits do just that.
Snell moved to Indiana after college with plans to be a teacher. But at the time, Indiana was laying off teachers, so she stepped into a job in the nonprofit sector. She quickly realized it was her dream job. In those early years, she admits that while she did evaluation work, it wasn’t formalized. ln fact, she describes it as “scrappy.” But from the start, she understood the importance of assessment.
Now, one of her responsibilities at the Indianapolis-based Hedges & Associates is to lead the evaluation team’s work. Since beginning in 2002, the company has offered services to build nonprofits’ capacity and later help with evaluations.
In 2013, a widely circulated essay by Microsoft mogul Bill Gates extolled the role that measurement plays in improving the human condition, how it improved the delivery of vital services worldwide. But he also offered a rueful observation.
“This may seem basic,” he wrote, “but it is amazing how often it (measurement) is not done and how hard it is to get right.”
Perhaps in response to the essay, Snell said local nonprofits began requesting technical support, heavily focused on quantitative measurements. To that end, the company hired a technical evaluation expert to help develop stronger metrics and intentional strategy.
But in many cases, this was a bit disconnected from reality. Snell’s team learned that what should be done might not be what nonprofits had the ability or capacity to do.
“Nonprofits were all of a sudden expected to track certain metrics and do certain things with very little resources provided to do so. Evaluation work is not cheap. It is labor intensive, it takes a lot of time even when you think of just cleaning up data,” said Snell.
So, her team began asking to see a nonprofit’s data before it developed a proposal or entered into a contract.
“Before we develop a proposal, can we see what you’re working with? We will take a look at it, and if it’s not consistently collected or there’s not enough data to make a valid finding, we’ll say, ‘Don’t waste your time.’” Instead, in those cases, she said, they suggested qualitative collection, to determine where to improve and oftentimes the development of a logic model and evaluation foundational pieces, helping to put measurement tools in place.
“Many nonprofits didn’t have data or the right data to do thorough and meaningful evaluations. What they needed was support to determine what to collect as a precursor to evaluation,” Snell said. “Then a year or two years from now, we have something meaningful to evaluate.”
Snell said initially local foundations drove evaluations, but now more individuals and corporate donors have joined the ranks. More importantly, some nonprofits have tackled evaluation, not because of outside influence, but because the organization is committed to its outcomes.
Today, the use of data governs almost every aspect of our lives. This is particularly true for philanthropy, which relies on it to inform decision-making, define problems and measure impact. Lopez and Snell have seen this shift firsthand. Nonprofits understand that they must show qualitative and quantitative data, but the challenge for many nonprofits revolves around the “hows” – how to accomplish it, how to pay for it and how to help staff understand the correlation between collecting data and their day-to-day functions.
And nationally, that’s been the case. In a 2018 book, the authors of Engine of Impact: Essentials of Strategic Leadership in the Nonprofit Sector, 50 percent of the 3,000 nonprofit stakeholders surveyed struggle with impact evaluation. Respondents cited inadequate or unreliable measurement of impact and performance being a challenge, and of the group, 42 percent said that more than half of their major donors require impact evaluations, but only a fraction are willing to pay for it.
And that’s not all they worry about. Lopez said nonprofit staffs often have a palpable fear of not meeting targets and that that will have an adverse impact on funding.
“We really try to build a culture of ‘We do evaluation for the purpose of learning and growth and improvement.’ And it’s OK, if that means we’re not hitting those targets. Let’s figure out why and what to do differently. If we’re not studying and implementing an evaluation plan, we’re not going to learn,” she said.
Snell said she found that local funders are looking for the nonprofit that discovers what’s not working and changes it. While the funders want outcomes, they’re practical and know that it takes time to set up tracking procedures and measuring for some time before it can be attributed.
“I think you definitely have to be looking at which of your programs are producing outcomes, but I think the other side of that is we’re working with humans,” said Snell. “Most of our work is in the social services sector. Some of the evaluation pieces may not always feel ethical. When you’re thinking about a test group, would you deprive a certain group of the population from a certain service to see if it works? I think there will always be that challenge of how valid you can get the data.” said Snell.
Bottom line, Lopez believes that Central Indiana funders are more partner-oriented.
“Local funders have pushed grantees to get clear about outcomes and have strong metrics in place with quantitative data to demonstrate their impact,” Lopez said. “For them it is not a high-stakes test – meet the metrics or funding isn’t continued – but rather, ‘Let’s have an honest conversation around where you are or aren’t meeting those metrics and what kind of capacity support is needed. Accountability is a strong word, but in a way, they’re really pushing the grantees that they’re partnering with to get clear about their outcomes and have strong metrics in place with quantitative data to demonstrate their impact.”
“And that’s where typically, we’ll be asked to come in to help support these nonprofits,” said Lopez. “Organizations are collecting data, that’s really not the issue. When it comes to evaluation, it’s helping them to figure out: Are they collecting the right data? Is the data clean and accurate to reflect what they’re wanting to collect? And how are they using it to make meaning and inform their work. And That’s what we really come in to help them with.”
Oftentimes, federal and state funding requires an external evaluator. But she’s seen the tide change at the federal level, moving from compliance to quality improvement and looking beyond a checklist of accomplishments. They are asking the nonprofits to show how their work is moving the needle.
“In multiyear grants, they want to see how you’re choosing your data and show that you’re using that data from the first year to inform any changes for the next year of programming, professional development and other refinements,” Lopez said.
What most nonprofits struggle with is carving out the time to collect the data.
“So, we really try to help them understand the critical value and importance of building that into their schedule, just like they would build in the next level of programming or services that they would offer. There are really tremendous and helpful data tools out there,” said Lopez who uses a participatory evaluation framework.
“We really want to build their capacity and that sustainability beyond our engagement because we know that most of them cannot afford to hire us forever to do evaluation work. We really want it to become a part of their culture, not just something they outsource to the consultant when a grant report is due. That’s why we spend time building that capacity and knowledge, called data literacy, and evaluation literacy within the organization,” she said.
Snell said it needs to be part of staff’s job responsibilities, not an afterthought.
“Nonprofit professionals typically didn’t start in their career wanting to be evaluators. Right? They started because they are caring and passionate about the program,” said Snell. “However, we owe it to the individuals we’re signing up to serve to know if what we’re doing really matters. This is a step to get there, and it’s not as scary as what people think.”
The opportunity and responsibility are there to utilize the results for planning and decision-making.
“That’s when you see the transformation really occur. And when we see it, it gets us excited.” Citing an example of a local Head Start organization that her company trained, agency staff reached out after it reviewed its data. The staff called because they wanted to go deeper and look at how dads are engaged.
“They felt like that’s an area of concern and stopped to really use their data and to dig into ‘What is happening with dads and where are the gaps and opportunities?’ before they just went to program changes. We’re like ‘Yay, this is so exciting.’ We didn’t have to remind them. They got it.” said Lopez.
Snell cited similar experiences.
“We’ve seen some really great success stories from organizations that have utilized research to inform and change their programming decisions,” she said. “We had one client who was able to secure funding for a whole new curriculum to be developed based on what we learned about the outcomes they weren’t able to get to with the current curriculum.”
Another local organization, she said, did the full evaluation gamut and learned that their collection measurements weren’t telling the entire story.
“We were able to reset how they were evaluating and now their story will be even stronger. I sat in hours and hours of interviews with their participants, and (through) the collection process (learned), we just weren’t getting to that same data,” said Snell who’s hopeful that both the qualitative and quantitative information will tell the same story in the next year.
Lopez believes that if a nonprofit is struggling with fund development, enrollment or retention, evaluation can help solve those problems.
“A lot of the issues that we hear a nonprofit is struggling with, usually evaluation can help solve. A lot of times, individual donors are becoming more sophisticated and want to see the impact that their dollars will have. Your evaluation can help tell that story of how (a donor’s) funding goes to support the cause and furthering its mission. It goes back to using your data.”
Not every organization is ready to jump into impact evaluation, there is a continuum. Some nonprofits begin with number counts. But as nonprofits become more sophisticated, here is some advice from Snell and Lopez.
• Meet your staff where they are. Hedges offers a workshop called “Love your Logic Model” and Transform offers “Evaluation 101.” Both companies believe in starting staffs with the basics. With turnover rate in the sector high, implementing standard operating procedures with internal systems and procedures in place is key to continuing the effort.
• Involve programming staff early in the impact strategy, helping to see the entire picture.
• Start by including metrics in job descriptions and take time to explain to potential candidates how data collection is part of the culture.
• Create a work-flow chart with a clear understanding of how evaluation fits into the day-to-day work plans to ensure the effort is not an addition, but a daily expectation.
• Continuously refine how data is collected.
• Reinforce that if data indicates a programming isn’t working, the focus needs to be on readjustment, not blame.
• Design pilot or innovative programs with research. There are multiple evaluation methods and numerous processes nonprofits can use to match desired outcomes.
• If resources are tight, interviewing participants should top the list to inform your program with the voices of those you are serving.
• Share what you are learning with two audiences – internal and external. Internally can be a powerful affirmation or enlighten staff, board and volunteers about targets not hit.
• Research to locate best tool, particularly with the more “social side” like self-efficacy there are tried-and-true evaluation tools that have been validated to test those specifically.
Evaluation Resources
If you’re interested in keeping up-to-date on evaluation, Amanda Lopez and Jodi Snell recommend two membership organizations that offer top-notch resources, webinars and conferences and share the ethics of evaluation and trends.
If you are looking for further reading, Snell recommends the 2011 publication “Leap of Reason” by Mario Morino. The author focuses on integrating evaluation into regular work.
“It’s the expectation that everyone is driven by those outcomes. What I really like is that nonprofit evaluation is not being driven by an outside force, but it’s the responsibility to the community you signed up to serve to make sure that what you’re doing works. If you’re not making sure it works than what are you doing. Why would we keep doing what we’re doing?”
Lopez has several tool recommendations.
• Data-informed decision-making toolkit : Transform Consulting worked with the Indiana Early Learning Advisory Committee (ELAC) data workgroup to create this material, but the resource could be utilized by any organization. Some highlights: The data visual is a good overview tool and follows the 4-step evaluation process. It also includes a list of publicly available data by category and data visualization tips and strategies.
• Data Playbook: A helpful resource for organizations to guide the evaluation process and plan. Lopez’s team used it to help develop the Indiana Early Learning Advisory Committee’s data toolkit.
• National Head Start Association (NHSA) launched its own Data Playbook resource for how to use data to inform programmatic changes (CQI process). Even if an organization is not in the early childhood education industry, this site provides an example of how organizations are using data to drive change and how applicable it is.
By
Lauren Kreutzinger, manager, VonLehman CPA & Advisory Firm
A
collaborative arrangement may be the simplest relationship between nonprofits
for accounting purposes. These are typically contractual agreements in which
two or more organizations are active participants in a joint activity.
One
example would be a private school that’s jointly operated by two religious organizations.
Another would be a nonprofit that provides free clothing and operates a shop at
the local homeless shelter.
It
is important to note that the financial reporting rules in these arrangements
depend on the type of collaborative relationship entered into by the parties.
Reporting costs and revenues
In
any collaborative arrangement, the nonprofit considered the “principal” for the
arrangement should report costs incurred and revenues generated from
transactions with third parties on a gross basis in their statement of
activities.
Generally,
the principal is the entity that has control of the goods or services provided
in the transaction. But Generally Accepted Accounting Principles (GAAP) should
be followed for each particular situation.
The
nonprofits should present payments between participants according to their
nature, following accounting guidance for the type of revenue or expense
involved in the transaction. Participants in a collaborative arrangement also are
required to make certain disclosures in their financial statement footnotes.
For example, they must report the nature and purpose of the arrangement and each
organization’s rights and obligations.
When two nonprofits form
a new legal entity
In
some circumstances, two organizations may determine that the best route forward
is to form a new legal entity. A merger takes place when the boards of
directors of both nonprofits cede control to the newly formed entity. The historical
values of the assets and liabilities of the organizations are combined, and the
accounting policies of the original entities must be brought into conformity for
the new entity.
If one nonprofit cedes
control to the other
Another
option is for the board of one organization to cede control of its operations
to another entity. For example: One nonprofit allows the other nonprofit to
appoint the majority of its board as part of its decision to engage in
cooperative activities. In such a case, an
acquisition takesplace, with the
remaining organization considered the acquirer. The remaining entity must
record the acquisition based on the current value of the acquired organization’s
assets and liabilities.
If
there’s an excess of current value over original cost to the organization being
acquired, that amount is recorded as a contribution. If the value is lower, the
difference is generally recorded as goodwill not as an expense. But, if the
operations of the acquired organization are predominantly supported by contributions
and returns on investments, the difference is recorded as a separate charge in the
acquirer’s statement of activities.
Let’s
say your nonprofit assumes control of another entity and GAAP requires you to
consolidate financial statements with the other. You should account for your
interest in the other nonprofit and the cooperative activity by applying an
acquisition method described in GAAP.
If
the shoe is on the other foot, and it’s your
nonprofit that cedes control of its operations to another entity, that
organization may need to consolidate your organization (including the
cooperative activity) starting on the “acquisition” date. If your nonprofit will
present its own separate financial statements, you must determine whether to
establish a new basis for reporting assets and liabilities based on the other
entity’s basis.
When the new legal
entity houses a joint activity
In
many cases, a new legal entity is formed only when the outcome is to house the
cooperative activity instead of all activities of the organizations that are collaborating.
This would be neither a merger nor an acquisition.
However,
to determine the proper accounting treatment, it’s important to look at which,
if any, collaborator has control over the activity.
Seek help
Reporting
your collaborative activities with other organizations in your financial
statements is an important responsibility. Your VonLehman advisor can help you
understand the rules and how to comply with your specific reporting
obligations.
Lauren Kreutzinger is a manager
with VonLehman CPA & Advisory Firm. She specializes in providing auditing,
review, compilation, and business advisory services for a wide range of
nonprofit organizations. She serves on the firm’s Nonprofit/Government Service
Group and has achieved the American Institute of CPAs’ Nonprofit Certification.
She frequently contributes nonprofit industry related content for the firm’s
website and newsletters and has also presented at various nonprofit educational
seminars hosted by VonLehman and other industry leaders.
By Pamela
Clark, director of student services and admissions and Abby Rolland,
communications project manager, Lilly Family School of Philanthropy
Who benefits from internships?
In the nonprofit sector, internships provide crucial, practical
experiences for students preparing for careers in the field. At the Lilly
Family School of Philanthropy, both undergraduate and graduate students in
philanthropic studies complete at least one internship.
Tyrone Freeman, Ph.D., believes internships are a vital part of the
undergraduate learning experience.
“They provide students with pre-professional opportunities in the
workplace that expose them to careers and organizations of interest.
“Internships test students’ abilities, build their networks, and let
them try out various professional roles and workplace cultures before they make
their own career decisions,” said the director of undergraduate programs and
assistant professor of philanthropic studies at the Lilly Family School of
Philanthropy.
Students find that internships enhance and contribute to their
experiences overall. Claire Ralston, a senior in the philanthropic studies
program, wanted to intern at Shepherd Community Center. So, she reached out to
chief development officer Steve DeBuhr in order to discuss creating an
internship that not only gave Ralston firsthand experience of work in the
sector, but also benefited the Center.
Ralston spent last summer refining the Center’s stewardship process,
helping with events, and managing volunteers. Her internship gave her tangible
skills to be transferred to a future career. “It was a well-rounded experience
for me.”
Her supervisor, DeBuhr, noted the benefits to the nonprofit. Not only
did she implement her book learning, but her work as become its standard
operating procedure.
“Claire was able to implement what she’s learned at the school and
combine it with an attention to detail and a desire to pursue excellence. Her
work has become our standard operating procedure for our newly formulated
stewardship program, and any on-going benefit to Shepherd attained by thanking
or connecting to our donors will in no small means be attributed to her work,”
said DeBuhr.
Kathi Badertscher, Ph.D., director of graduate programs and lecturer of
philanthropic studies, added, “the internship course provides the culminating
experiential learning opportunity for students to apply their graduate-level
education in practice.
“Students work or volunteer in a wide range of nonprofit settings, from
“voluntourism” to special event planning to capital campaign management, based
on their interests. They gain experience in setting priorities and contending
with some of the realities of philanthropic work such as human and financial
resource constraints.
“Internships provide a crucial bridge between the classroom, real-world
issues in philanthropy, and skill development in a professional setting,”
Badertscher said.
Macy Jackson, another senior in the bachelor’s degree program, spent
last fall with Gleaner’s Food Bank of Indiana working with their grants and
foundations department. She read and analyzed past grant reports and gathered
the information in one place in order for current staff to utilize the
information for future grants. She also wrote grant proposals, a practical
skill she knows will be useful when she looks for full-time work.
“I’ve been able to use what I’ve learned in class, such as knowing the
best way to talk to donors and foundations, in my work. I enjoy working with
organizations and figuring out how I can integrate what I’ve learned to help
them.”
Savanah Strever, director of
grants and foundation relations and Jackson’s supervisor at Gleaner’s, also
shared her thoughts on the advantage of hosting an intern.
“Having Macy allowed us to tackle
several projects that otherwise may have been put on the backburner. She helped
create systems and tools that will improve efficiency, ultimately resulting in
increased fundraising capacity for those in need,” Strever explained.
Students are not limited to internships in Indianapolis or their
hometowns. M.A. alumna Kelly Mitchell, the current Treasurer of the State of
Indiana, spent her internship at a nonprofit organization in Kathmandu, Nepal.
“Being on the front lines and seeing the powerful effects philanthropy
can have impacted me a great deal,” she explained.
Current bachelor’s degree student Kelsey Harrington spent time in South
Africa, learning that building relationships and sustaining long-term impact are
important aspects of philanthropy.
Her experience helped her earn an internship at the George and Frances
Ball Foundation last fall, which will evolve into a full-time role once she
graduates. This is an additional side-effect of some internships that is not
limited to Harrington.
Nationally, more than 40% of the total expected number of new hires
from 2011-2012 were expected to come from a company’s internship program,
according to the National Association of Colleges & Employers (NACE) 2012
Internship & Co-op Survey.
Nonprofits are no different. The opportunity to screen potential
employees is one benefit for nonprofits who host internships. In addition, both
the organization and the intern can determine if the pair fits together well.
JoAnna Ness, M.A. ’18, earned her current job as the Communications
Director for the Steuben County Community Foundation after a summer internship there
working in communications. “During my internship, we discovered it was a great
fit on both ends, and the timing worked out perfectly.”
How can an intern benefit your nonprofit organization?
Address
an organizational need.
Gain
fresh, energetic, and knowledgeable “staff” at reduced cost.
Screen
potential employees.
Increase
interaction with the university and gain access to faculty expertise.
Contribute
to professional growth of the student.
Erin Wuertz, B.A. ’18, has a passion for domestic violence victims.
Volunteering at Coburn Place led to an internship in philanthropy, which then
evolved into another internship there in events management. Since then, Wuertz first
earned a full-time role as a mentor, and now coordinates the organization’s
volunteers.
Finally, senior Natalie Laskowski spent last summer as an intern with
the Future Farmers of America (FFA) Foundation on their development and donor
services team. Laskowski worked with projects ranging from annual fund data
analysis to endowment reporting to corporate sponsorship engagement. Her
internship extended to the fall, and she then received the opportunity to begin
full-time work as the Development Coordinator in the spring.
Her commitment to FFA and
creativity in learning did not go unnoticed by FFA Foundation President Molly
Ball.
“Natalie is awesome. She takes a
project and looks at it from a different angle in order to find innovative ways
to approach an issue,” Ball explained.
At least four graduating students
in the bachelor’s and master’s degree programs this year alone will work
full-time with organizations that previously hosted them as interns.
“We’re grateful to the many nonprofit
organizations that have partnered with us and our students in providing rich
experiences that support academic objectives, and look forward to continuing current
partnerships and establishing new ones with nonprofit organizations,”
Badertscher said.
Interested in learning how you can benefit from having an
intern? Contact Pamela Clark at pamelac@iupui.edu.
Pamela Clark currently serves as the director of student services and admissions for the IU Lilly Family School of Philanthropy. She enjoys working with students and supporting them in achieving their academic goals. She earned a bachelor’s degree in elementary education from the University of Evansville and a master’s degree in adult education from Indiana University.
Abby Rolland serves as the communications project manager at the Lilly Family School of Philanthropy, and is also working towards a master’s degree in philanthropic studies. She holds a bachelor’s degree in history from Gettysburg College
Every two years, we do a quick analysis of the nonprofit leadership transitions Charitable Advisors has supported. Our takeaway two years ago was that an increasing number of new ED/CEOs were coming from outwardly facing roles like fundraising and advocacy in contrast to the longstanding “program expert” being the primary leaders being considered.
For
this assessment, we analyzed the 26 organizations that we worked with through
the entire transition process in 2017-2018. Internally, we found this exercise
helpful to not only celebrate success, but also to set goals for the future.
Here’s
a brief summary of what we’re seeing from the frontlines.
Number of leadership transitions – In total, we supported 12
organizations in 2017 and 17 in 2018. Of that number, we were engaged in only the
search-preparation work with several clients. For purposes of this analysis
that brings the two-year total to 26.
The
increase in transitions from 2017 to 2018 means this trend of retirements and
turnover is continuing to impact our sector. We are already working with three
organizations planning leadership retirements in late 2019 or early 2020.
First-time executive directors
and CEOs –
For 69 percent of the 2017/2018 hires, this was their first ED/CEO position. Of
that number, 19 percent were internal promotions. In general, board members
seem to have a preference for capable internal candidates, but many have
limited knowledge of the staff leaders reporting to the ED/CEO.
Recruiting sectors: In total, 73 percent of the new
leaders came from the nonprofit sector and 19 percent previously held business
roles. We expect nonprofit backgrounds to continue to dominate but board
members are sometimes open to business leaders who bring specific expertise or
broad networks.
Age/generation: We debated whether to divide hires by generation or age group. We don’t track birthdays, so we estimated age and generation. It is a good sign that early and mid-career professionals are stepping up into the ED/CEO roles. On the downside, it may be getting harder for older leaders to find their next roles and that likely means we are underutilizing experienced people from our sector.
Gender: The past two years have
been a tale of two streaks. In 2017, our clients overwhelmingly hired female
ED/CEOs. In 2018, there was an extended stretch that was heavily male. For the
two years, overall, the mix was 65 percent female and 35 percent male. This
overall mix is close to the national statistic but shows how small samples can
skew perceptions.
Race/Ethnicity: I am pleased to be able to
say that board leaders are becoming much more vocal about their desires to
recruit diverse candidates who are often underrepresented on their leadership
teams. We are also focused on improving this metric and can report that 19
percent (5) of our ED/CEO hires over this two-year period were leaders of
color, including three of our last 10. With each search, we are working to
expand our reach and visibility with the pool of capable diverse leaders. Our
goal is to present a diverse slate of qualified candidates to every search
committee.
To
help support our effort, we encourage candidates to provide their information
to our Executive Candidate pool even if current open searches are not of
interest. Please submit at: https://charitableadvisors.hirecentric.com/jobs/133773.html
Looking ahead: As we look to 2019 and
beyond, we anticipate a continuing flow of boomer retirements and natural leadership
turnover that will provide opportunities for next generation leaders. It is our
goal to continue to improve our processes and networks to make a positive contribution
to the changes in nonprofit leadership.
We are excited about our reputation for being an affordable and effective alternative to board members taking on the search themselves in this tight labor market. Please contact Bryan Orander at Bryan@CharitableAdvisors.com or Don Gulbrandsen at Don@CharitableAdvisors.com with questions or comments about affordable, effective executive search or succession planning support.
Earlier this year, I interviewed a 30-something arts organization’s CEO about leadership and staff development and the discussion turned to CEO turnover and succession planning. I explained that more than half of the leadership transitions that Charitable Advisors’ supports are for retiring nonprofit executives.
The arts organization CEO surprised me by taking the conversation in a different direction, sharing that she feels most successful leaders her age see their roles as 3-5 years and then they want to move to a different challenge to continue to grow as leaders.
This may be an emerging trend to watch. Looking at the last 50 leadership transitions we have supported, only two have had tenures less than two years, but two clients from 2013 have recently called us as their young, successful leaders move to new opportunities.
That
means that board and staff leaders need to be extra vigilant in defining what
succession planning looks like to sustain their organizations:
Succession planning for retirement: Traditionally, serious succession planning is done when an older leader is willing to share that they see retirement on the horizon. From past experience, the board, hoping it is an idea that will pass, sometimes ignores this. More appropriately, it triggers conversations about reviewing/grooming potential internal successors and taking the leader’s retirement into account in organizational planning.
Do it without the pending retirement: Every organization has the opportunity to approach succession planning to prepare for an unexpected leadership departure plus the chance to attract and develop more staff and board leaders.These discussions also have the positive side effect of making those key roles more “do-able” by actively sharing leadership with others.
For its direct and concise explanations, one of my favorite resources on this topic is a white paper written by my friend and Noblesville native Tim Wolford for the Annie E. Casey Foundation called “Building Leaderful Organizations” http://www.aecf.org/resources/building-leaderful-organizations/
Your funders and donors care: For years, United Way has mandated that organizations have written succession plans. Foundation leaders are very aware of how important leaders are to their grantee organizations, and also that every capable leader eventually leaves.
Are you prepared? What’s your plan if your senior leader gives a year’s notice or becomes ill, or your younger leader gives you a few weeks’ notice? Call Bryan Orander at 317-752-7153 or Bryan@CharitableAdvisors.comto learn more or talk about applying these insights to your organization.
As charitable organizations seek to
increase streams of revenue — to provide more services, support more staff or
help ensure long-term sustainability — many dabble in sources of business
revenue to supplement the financial bottom line. For example, an organization with
a pool may wish to rent the pool and locker room access to local schools to use
for their interscholastic or intramural swimming teams.
Business activities are fairly
common among charitable organizations, in fact according to the National Center
for Charitable Statistics, nearly 70 percent of the $1.4 trillion of nonprofit
income was earned. The activities themselves are not inherently wrong or
impermissible for charities. They only become an issue if they are unrelated to
the charitable purposes of the organization and represent a substantial
percentage of the total revenue and activities of the organization. Unrelated
business income tax (UBIT) can apply to income from those types of unrelated
business activities.
In fact, ‘business’ activities are
often related to the charitable nature of the nonprofit (i.e., sales of
counseling or therapeutic services, or selling donated goods). Yet, many
regularly carried-on-business activities do not qualify as related (i.e.,
receiving debt-financed rental income or selling advertisements in a
newsletter) even if the income produced is used to further the tax-exempt
purposes.
When nonprofit business activities
start to grow, regardless of whether they are ‘related’ to the charitable
purposes of the organization, best practices often involve driving those
activities through a subsidiary legal entity such as an LLC, a supporting
organization, or a traditional business corporation.
Called a ‘blocker’ corporation, it
is a traditional business c-corporation that is wholly owned by a charity but
whose activities are not attributed to the charity. This is true even if the
charity exercises substantial influence or control over the blocker
corporation’s activities. Through a blocker corporation, not only is the charity
protected from liability related to the business activity, but also the charity
may engage in substantial revenue-generating activities that would otherwise be
considered UBIT.
Understanding UBIT
In deciding whether or not to
conduct business activities through a blocker corporation, it is important to
first understand UBIT and its purpose. UBIT was created to ensure that
tax-exempt organizations did not start competing with for-profit entities by
providing goods and services beyond the scope of their tax-exemption and not
pay taxes.
What can trigger the UBIT is
complicated and, as usual, comes with a host of exceptions.
Unrelated business taxable income
(UBTI) is defined by the IRS as “the gross income derived by any organization
from any unrelated trade or business regularly carried on by it.” An “unrelated
business” is “any trade or business the conduct of which is not substantially
related to the exercise or performance by such organization of its charitable,
educational, or other purpose or function constituting the basis for its
exemption.”
In order for income to be
classified as UBTI, the business activity must (1) be derived from the
operation of a trade or a business, (2) be regularly carried on, and (3) not be
substantially related to the tax-exempt purpose of the organization. If a
business activity meets those criteria, then that income must be reported on
the Form 990-T, if it is over $1,000. At that point, the income will be subject
to standard corporate tax rates, and if such income is more than insubstantial,
it can threaten a charity’s tax-exempt status.
The UBTI and UBIT determinations
vary on a case-by-case basis because of many exceptions, exclusion and
modifications to the law, many of which do not make much sense.
Examples of business activities not
subject to UBIT include:
Passive
income, such as dividend and interest income, royalties and rents from real
estate property
Any
activity in which 85 percent or more of the work is performed by unpaid
volunteers is exempt from UBIT, such as a thrift store
Sales of
donated items
Examples of common sources of
taxable income include:
Sales from
advertisements in a newsletter or on a website
Rental
income from debt-financed property (i.e. renting out property acquired from a
loan for big events like weddings or fundraising concerts for a discounted fee)
Investments
like hedge funds and private equity funds that function as partnerships (unless
a blocker corporation is used)
Fees earned
for providing administrative or clerical services to another organization
Use of a blocker corporation
All these are the types of business
activities that might be better off and more successful if spun into a blocker
corporation. And the blocker corporation transfers income to the charity in the
form of passive, non-taxable income.
Recall that through a blocker
corporation, not only is the charity protected from liability related to the
business activity, but the charity may engage in substantial revenue-generating
activities that would otherwise be considered UBIT.
Suppose there is a charity that
promotes health and wellness in a community and operates an animal shelter also
has an associated vet clinic that charges for veterinarian services. Vet
services, being unrelated to human health and wellness, may trigger UBIT.
However, having the vet services provided by a blocker corporation allows those
services to continue being offered and the income used to support other health
and wellness and animal shelter programs without triggering UBIT.
By using blocker corporations,
charitable organizations maintain their tax-exempt status and can still
increase revenue without paying UBIT. If a nonprofit is already conducting
business but is not expanding due to unease about paying UBIT and the risk of
losing its tax-exempt status, a blocker corporation may be the answer.
However, it is important that the
nonprofit organization does not “control” the blocker corporation. “Control”
means the nonprofit organization owns more than 50 percent of the stock,
capital, or beneficial interests in the blocker entity. There is some
indication that “control” by the nonprofit organization might mean owning at
least 80 percent of the stock, capital, or beneficial interests in the blocker
entity, but there is a conflict of the law and would require obtaining counsel
exceptionally qualified in the creation of blocker corporations to determine.
Therefore, to be safe nonprofit organizations should own no more than 50
percent of the blocker organization in whatever form that ownership interest
may be. In the end, remaining under these ownership limits allows what would otherwise
be UBTI to pass to the nonprofit organization without being taxed.
The primary activities of charities
are, and should remain, pursuing charitable ends. If a business opportunity
develops to help add to the bottom line, it may be worth exploring how that
income can be converted into passive income for the charity, especially if the
charity has already developed an expertise in a given area through which the
larger community would benefit.
Pursuing or continuing business
activities does not necessarily run the grave risks that it is often believed
to have. Besides blocker corporations, there are other ways of avoiding UBIT,
including having volunteers (not paid by the organization) do the work or even
restructuring the activity so that it more closely relates to the charitable
purpose.
Blocker corporations offer just one
way for organizations to get where they want to go with a larger budget to do
so. Performing business activities does not have to be intimidating and can be
done in compliance with all regulations.
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 to nonprofit organizations.
Contact Zac Kester, executive director, at 317-333-6065
or zkester@charitableallies.org with any questions.
Substantiation
AccountingWeb. UBIT: When a Nonprofit Is Profitable. Meredith Pratt, CPA. Jan 7th 2013. Tax-Exempt Entities: UBIT and Debt-Financed Income, Rack & Olansen, A Professional Law Corporation
Hinckley Allen – Nonprofit Update. Katie A. Ahern. Five Things Nonprofits Should Know About: Unrelated Business Taxable Income (“UBTI”). February 13, 2014.
Mosher & Wagenmaker, LLC. A Basic Study of Unrelated Business Income Under IRC §512.
IRC section 512(a)(1).
IRC section 513.
IRC section 513(a)(1).
IRC section 513(a)(2).
IRC section 513(a)(3).
IRC section 512(b)(4).
IRC section 512(b)(13).
IRC section 514(b)(1)(A).
26 C.F.R. § 1.512(b)–1(L).
Jacobson Jarvis & CO, PLLC. What Not-for-Profits Need to Know About Tax Compliance.
Mosher & Wagenmaker, LLC. A Basic Study of Unrelated Business Income Under IRC §512.
The Nonprofit Times. Tax Strategies for Hedge Funds, Private Equity Funds. Karen Andersen, CPA.
McGuire Woods. IRS Advisory Committee Releases Recommendations on UBTI Compliance. August 21, 2014
Rack & Olansen. A Professional Law Corporation. Tax-Exempt Entities: UBIT and Debt-Financed Income
Emily Chan, Profitabe Side of Nonprofits – Part I: Earned Income, http://www.nonprofitlawblog.com/the-profitable-side-of-nonprofits-part-i-earned-income/
