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The rich deliciousness of Blue Avocado . . . in-depth stories that give you the inside scoop.

Special 4-Day Discounts, Deals and a Contest! It's Blue Avocado #90

In the best of times or the worst of times, we nonprofits are always ready for a good deal, a good discount or something in our favorite currency: free.

All deals, discounts and freebies end at Friday, September 20, 2013 at 5 pm pacific time (8 pm eastern). And as a bonus to our bonus issue, we have a Blue Avocado contest about boards.

Thanks to our contributors for making these offers. Keep calm and read on. -- Susan Sanow, Blue Avocado Project Manager


How About a Game of Blue Avocado "Truth or Dare" on Boards?

Want to sit around the Blue Avocado campfire with

Jan Masaoka and Rick Cohen? 10 lucky readers will be eligible to join the campfire conversation on boards of directors.

How do you qualify? Submit a true story in 25 words or less of the most funniest/most interesting/most outrageous/most inspiring thing that ever happened to you at a board meeting. Send it to blueavocado@hotmail.com by Friday, September 27 at 5 pm pacific time (8 pm eastern time). Write "Truth or Dare" in the subject matter line. If selected, the idea may be shared with our readers (with or without attribution --- let us know.) Decisions by the judges are final.

The campfire conversation with Jan will occur with the 10 winners on Friday, November 1 at noon pacific time (3 pm eastern time). Winners will be notifed by October 15.


CharityChannel Press offers a 20% discount on everything in its In the Trenches series of books and workbooks, just for Blue Avocadoo readers.

With 24 titles to choose from -- such as fundraising, leading a board, being an executive director, and even how to become a successful consultant -- you're sure to find one you'll like.

Review the catalog of titles, and when you're ready to order, use the code BlueAvocado to get the special deal . . . . but just during the 4-day bonus issue period (Tuesday, Sept 17 through Friday, Sept 20). It applies to any or all of the CharityChannel Press books, manuals, and workbooks, in any quantity. (This offer may not be combined with any other offer except for additional discounts available for bulk purchases.)

A fundraising advice call with Kim Klein (the superstar author and speaker) and a subscription to Grassroots Fundraising Journal: Special subscription rate for Blue Avocado readers: just $29 for a one-year subscrption with unlimited access to the online archive of over 400 fundraising articles. Each issue of the Grassroots Fundraising Journal has practical, do-able pieces on special events, direct mail, major donor programs, membership campaigns and more.

Go to grassrootsfundraising.org/subscribe, choose the $39 rate and enter the promo code "blueavocado". You'll then qualify for the $10 off! Offer good through September 20 at 5:00 pm pacific.

And, Blue Avocado readers who subscribe will be invited to have your burning fundraising questions answered on a free call with the Grassroots Institute for Fundraising Training's Laurene Francois and Kim Klein! The one-hour conversation is set for Tuesday, November 12 at 1:00 pm pacific time (4pm eastern).


Master Class for Technology Champions

Technology Champions aren't necessarily code wizards. Instead, they understand the role of technology in supporting the work their organization does, and work to make it part of their organization's master plan.

Join NTEN for Master Classes in San Francisco on September 19, in Atlanta on October 24, or in Austin on November 14, and become a Technology Champion at your organization! Blue Avocado subscribers can click on the city name to register for the master classes at $30 off (discount code MC-BlueAvo!) Must register by September 20th to get this great rate.

Social Media for Nonprofits / Nonprofit Bootcamp

If you're in the Bay Area, don't miss these TWO opportunities: attend the Nonprofit Boot Camp on October 10 or Social Media for Nonprofits on October 11 at a special Blue Avocado reader price! Blue Avocado readers get $30 off your registration for either day. Tickets include registration, breakfast and lunch.

Just visit here and use the promo code "AVO" to register now.


Nonprofit Sustainability: Making Strategic Decisions for Financial Viability
October 17, 2013, 12 noon - 1 pm Pacific time (3 pm - 4 pm eastern)

Speakers: Jan Masaoka, Blue Avocado and CEO of CalNonprofits, and Steve Zimmerman, Spectrum Nonprofit Services

Too often program goals are discussed separately from financial means, although we all know that both must be discussed together. Jan and Steve will present the methodology for doing so from the book they co-authored with Jeanne Bell: Nonprofit Sustainability: Making Strategic Decisions for Financial Viability. This model can be used as an adjunct to or substitute for traditional strategic planning. Click here to register free by Friday, September 20 at 5 pm pacific time (8 pm eastern).

Get The Most Out of Your Year-End Fundraising
November 7, 2013, 10 am - 11:30 am pacific time (1:00- 2:30 eastern time)

Speaker: Kim Klein, Klein & Roth Consulting (and famous author and speaker!)

Can you say yes to any of these statements?

  1. I had a year-end plan but I got way behind and didn't revise it
  2. My year end plan is on track but we have to raise more money than we thought
  3. I admit I never had a year-end plan and now it seems late to create one

You are not alone. It is not too late to raise a lot more money in 2013. In this fast-paced webinar, Kim Klein will discuss six different strategies most organizations can do in the time that remains before December 31, 2013. You will learn how to focus on the donors most likely to give, who you should ask in person, what you really can do with social media, and how to get ready for next year. Click here to register for free. Registration remains open only until 5 pm pacific time (8 pm eastern) on Friday, September 20.

Matter-ness...How to Make Everyone in Your Ecosystem Count
November 13, 2013 10 am- 11:30 am pacific time (1 pm-2:30 pm eastern)

Speaker: Allison Fine, Senior Fellow, Demos

At the heart of all social change work are people. Allison Fine will explain how to re-organize our work to ensure that every person who wants to matter has an opportunity to speak, create, organize and donate on their behalf.

Allison is a Senior Fellow on the Democracy Team at Demos: A Network for Change and Action in New York City. She is the author of two award-winning books, contributes to HBR.org, hosts a monthly podcast for the Chronicle of Philanthropy, and writes her own blog.

To register for the free workshop, click here. Registration remains open until 5 pm pacific (8 pm eastern) on Friday, September 20.


Accounting and Bookkeeping Services for nonprofits

Jitasa currently serves over 200 nonprofits (they only work with nonprofits) across the United States, saving them up to 25% on their bookkeeping and accounting needs. Jitasa is offering Blue Avocado readers who are new customers an additional 20% off set-up fees. That could translate into savings of over $1,000 for your nonprofit.

To take advantage of this four-day offer follow the steps below:

  1. Fill out the Request a Quote Form by Friday, September 20
  2. Type the code BLUEAVOCADO13 in the comments section on the bottom of the form
  3. Speak with our agent to discuss the right solutions for your nonprofit
  4. Sign a contract for Jitasa solutions and receive 20% off your setup fees (you have only have to request a quote by September 20, not get through all the steps)

To learn more, visit www.jitasa.is or contact sales@jitasa.is. To request a quote, click here.


Don't forget that the biggest deal of all just may be your subscription to Blue Avocado - and you get that delivered to your inbox for absolutely free. What a deal! Why not say thank you with a gift to support Blue Avocado? Click here.

Surprisingly Uncomplicated Path for Developing Leaders

Kirk Kramer of The Bridgespan Group suggests some new approaches to leadership development in his recent papers. For Blue Avocado readers, he cuts right to the chase:

Blue Avocado: Kirk, what's the single most interesting point you have to make about nonprofit leadership development?

Kirk: As an executive director, hold your senior leaders responsible for developing future leaders. Add "developing leaders" to their goals for the year and hold them accountable to it, just like you would any other goal.

When we tell that to executives, they say . . .

Deconstructing Sustainability

Maybe in some mythic past it was possible to think first about strategic impact goals, and then about how to raise the money. But today we know better: you can't talk about what you're going to do without talking about how to get the money. And, you can't talk about how to get money without talking about what you're going to do. This piece is adapted from a chapter in Nonprofit Sustainability: Making Strategic Decisions for Financial Viability, by Jeanne Bell, Jan Masaoka, and Steve Zimmerman.

What is sustainability?

Most of us in the nonprofit sector are familiar with setting programmatic goals. For instance, we might set a goal of reducing high school dropout rates by 10% in our community, or a goal of increasing the quality of the observations of one hundred amateur astronomy clubs. Nevertheless, we often aren't sure what our financial goals are, or even what they should be. If the financial goal in a for-profit company is to maximize profit, should our goal be to have $0 profit? Or should it be to grow an endowment of $10 million, or to have a surplus of 5%, or a deficit of no more than $50,000?

In classical economics, the answer to this question is . . .

A Gay Activist is Conflicted about the Marriage Equality Campaign

What if you got a chance to chat over coffee with a deeply experienced, witty, and smart gay leader about the movement for marriage equality? He might say something you haven't seen elsewhere about the campaign. Listen in on a conversation with Matt Foreman (left, with Francisco De Leon to right):

Matt, isn't the Freedom to Marry movement a huge, unexpected, and unqualified success?

Well, yes. But frankly, I'm also a little conflicted about the issue. Fifteen years ago, when activists started pushing marriage equality in New York and I was lobbying for pro-gay legislation, I said "Folks, stay the hell out of Albany -- we can't even get a hate crimes bill passed because it would include the dreaded words 'sexual orientation' and you want us to put marriage on the table? No way, no how!"

I was convinced that marriage would have stalled and derailed . . .

Citizens United Unfair to One Million Corporations

Jack Shakely, former president of the California Community Foundation, takes a different tack (with a little wisecracking) on what to do about the Citizens United decision allowing for-profit corporations to spend unlimited funds on electoral campaigns:

A few weeks ago I received a breathless email (if such things exist) crowing that California had become the sixth state to pass a law demanding a constitutional amendment to overturn the 2010 Citizen's United Supreme Court decision on political campaign spending by corporations. Great! I thought: now all we need is two-thirds approval in both the House and Senate, then ratification by thirty-two more states, assuming the six stay on board. Good luck with that.

Then I thought about Citizens United in a new way.

Sidebar: Donor-Advised Funds Background

This brief introduction to donor-advised funds (DAFs) accompanies the Blue Avocado article "Donor-Advised Funds: Un-Transparent Tax Shelters for Good."

In 1931, a New York community foundation created the first donor-advised funds (DAFs). But although the term was widely used for 75 years, the phrase "donor advised fund" was not codified until 2006 when Congress passed pension and charity reform legislation.

Most donor-advised funds are held at two types of institutions:

  • Community foundations, where donor-advised funds are typically the large majority of assets held and grants made
  • Large financial institutions that handle stock-trading, mutual funds and other for-profit investments; they have now expanded into DAFs, a nonprofit analogue that's a logical extension to their existing business and skill sets.

The IRS describes the features of a donor-advised fund:

  • Donors contribute to an administering 501(c)(3) to establish -- fund -- a DAF. The charity keeps accounting track of each DAF separately.
  • Contributions to the DAF cannot be taken back by the donor. Contributions qualify for an income tax deduction at the time of the donation, governed by the usual deduction rules and rates.
  • The donor has the right to recommend grants from the DAF to qualified charitable recipients. The sponsoring organization may not be legally required accept the recommendation (although implementing the donor's recommendation is the basis of the business model).

In contrast to a private foundation, a DAF typically affords the advantages of two kinds of anonymity for a donor. First, the donor's identity need not be disclosed to the nonprofit which receives a donation from the donor's DAF. Second, the administering organization (a community foundation or Fidelity, say) does not have to report on its 990 grants from DAFs on a fund-by-fund basis.

The DAF administering ("sponsoring") organization typically provides the legal, administrative, investment management, and accounting work for DAFs. Compared to creating a private foundation, DAFs are often lower cost to administer for a donor.

For example, let's say that donor Phil A. Thropy has a high income year, and makes a $1 million donation to a donor-advised fund at Fidelity. That year he can deduct $1 million from his taxable income. The following year, Phil directs $50,000 from his DAF to his alma mater Harvard and $20,000 towards the YMCA. Over the next years (without limit), Phil makes grants from his DAF and can add funds to it as well. He pays Fidelity annually a fee of 0.6% (60 basis points) to administer the fund. (Fidelity charges low amounts for higher deposits.)

When Phil dies, the ability to direct the DAF passes to his heirs or designee. Community foundations often ask DAF donors for a provision that states after the second or third designee, any remaining funds would revert to the community foundation's general fund. In other words, Phil's daughter could continue making grants out of the DAF after his death, but if Phil had agreed to such a provision, upon his daughter's death any remaining funds would become unrestricted assets of the foundation.

How much money is in DAFs?

How many DAFs are there with how much money? The most recent data released by the IRS is for tax year 2006:

  • 2,398 institutions administering donor-advised funds
  • 160,000 donor-advised funds
  • $31.1 billion held in donor-advised funds
  • New contributions to DAFs in 2006 were $9 billion

More recently, The National Philanthropic Trust (NPT) published its 2011 Donor-Advised Fund Report. Intended to be "highly indicative" rather than "accurate," NPT collected data voluntarily offered by 478 administering institutions. NPT found that these 478 administered 162,000 DAFS with assets of $30 billion and charitable giving of $6.2 billion.

To return to the article that accompanies this sidebar, "Donor-Advised Funds: Non-Transparent Tax Shelters for Good," click here.

High Pay for Nonprofit Execs? Analysis of 100,000 Salaries

Everybody has an opinion about whether nonprofit executives are paid too little or too much, but almost nobody has any real data outside their own experiences. At last! Economist Linda Lampkin (left) analyzed 100,000 nonprofit CEO salaries and has a definitive (if a little statistics-wonky) answer:

Sometimes it seems that the whole credibility of the charitable sector hinges on the issue of compensation. So what exactly is too much pay? And who is getting it? A colleague and I decided to analyze Form 990 compensation data to bring some real numbers to the discussion (database info at the end of this article).

The IRS says nonprofits must pay "reasonable compensation" but there are few specific guidelines other than that total compensation must be compared with "what ordinarily would be paid for like services by like enterprises under like circumstances." "Like enterprises" means organizations that provide similar types of services and have similarly sized budgets. Using the ERI Economic Research Institute database of compensation data from Form 990s in 2009 (the most recent full set available), we calculated the mean and median salaries for almost 100,000 CEOs of charities, by revenue size:

Analysis of 100,000 nonprofit CEO salaries

[1] Mean is the mathematical average, calculated by adding up the data points and then dividing by the number of data points.[2] Median is the midpoint of the data, so the number of data points having values greater than or equal to the median is the same as the number less than or equal to it.[3] Standard deviation, a measure of the variability of the data, is the average amount by which individual data points in a data set differ from the arithmetic mean of all the data in the set.

Getting Real About Real-Time Evaluation

Every once in a while a field creeps closer to actually being helpful to nonprofits. Thanks to evaluators Clare Nolan and Fontane Lo for explaining a type of program evaluation -- and how to make it work for you.

Have you ever had an evaluation conducted for a program, and then waited months--or even years--for the findings to come out? When you finally got the evaluation report, were you annoyed because you had already changed the program significantly?

You're not alone! Traditional evaluations emphasize proving whether or not a program has worked. This requires a rigorous study design (with things like interventions and control groups), and findings are typically issued after all data are collected and thoroughly analyzed. That approach can mean a long time frame that makes the results useful for proving something to a funder, but less useful to a nonprofit earnestly trying to improve its services.

Real-time evaluation (RTE)

Fortunately, the field of evaluation has evolved and other forms of evaluation have emerged that emphasize . . .

Text Generation Leaders: Using Mobile Phones for Nonprofit Outreach

There are more people with cell phones than people who use Twitter . . . so then, why is there so much more nonprofit talk about Twitter than about reaching constituents and donors through their cell phones?

We talked with a non-neutral Doug Plank of MobileCause to learn more about the benefits of using cell phones to reach people. MobileCause provides services that make it easier for nonprofits to use mobile phones.

Q: Why should nonprofits read this article about cell phones, anyway?

A: People are connecting with you through their mobile phone whether you know it or not: 40% of people will experience your website for the first time through their phone, and 30% of all American adults read their email on their phones.

But we don't have anyone's mobile phone numbers! And they'll be mad if we call them!

First, you are not going to phone them. You are going to communicate with them by text. You are going to poll them, give them information that they've asked for, and thank them by text. And sometimes you will ask them to volunteer and give by text.

Probably the most important thing you can be doing now is building . . .

Vanguard Foundation Update: With Leader Pleading Guilty, "Truth and Reconciliation"?

The Vanguard Public Foundation was a high-profile, influential, progressive institution in San Francisco: the original "rich kids" foundation making grants to radical grassroots organizations and involving community members in grantmaking. As we chronicled in earlier Blue Avocado articles, Vanguard's ambitions coupled with absence of CEO oversight led to making the Foundation and many of its donors easy targets for a get-rich-quick scheme. Rick Cohen provides this update:

In all likelihood, within the next couple of months the former president and CEO of the Vanguard Public Foundation -- Hari Dillon -- will be sentenced for his self-admitted role in a small-scale version of a Bernie Madoff-like scam.

And around the same time, Mouli Cohen -- the persuasive businessman behind the scam -- will be sentenced as well. Just two weeks ago, he was convicted in U.S. District Court on 15 counts of wire fraud and 11 counts of money laundering (plus three counts of tax evasion). More than $30 million of foundation and donor money have disappeared.

As of now: Cohen is in jail and Dillon is facing jail; the Vanguard Foundation has closed its doors; there's talk of a grantee lawsuit (for awarded but unpaid grants); some activists are calling for a "tribunal" or a "truth and reconciliation process;" and progressive nonprofits are . . .


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