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

Contract Wizardry: Conjuring Impact from Government Contracts

Have you ever tried to piece together eleven government contracts for overlapping programs, trying to make them fit together to fund all the costs? Or have you had six foundation grants, all for the same program area, but each requiring different line items and paying for separate, narrowly defined expenses? If so, you are either a Contract Wizard or you need to know one:

The term "contract wizardry" caught our eye in a recent article from the Bridgespan Group: "Clients at the Center: Realizing the Potential of Multi-Service Organizations," by Bob Searle, Alex Neuhoff, and Andrew Belton. To learn more, we spoke with Bob and interviewed two real-life contract wizards -- one at a $700,000 nonprofit and one at a $65 million nonprofit.

Most funders -- whether government or foundations -- fund specific programs rather than provide core support to nonprofits. For example, a government contract with the local health department may fund case worker services to people with alcohol and drug abuse problems. Another government contract -- this time with the state and on a different fiscal calendar -- may fund services to people with disabilities, including alcoholism. And a foundation grant -- again on a different timeline -- may fund a research project that includes some family-based services for people in a specific neighborhood.

The challenge for nonprofit finance managers is not any simpler than turning a human into a hedgehog, and requires . . .

Only Bad Restaurants Go to Scale

We in nonprofits are good at taking on myths and sacred cows. But perhaps the least examined of these myths is the one about "going to scale." This OpEd takes a closer but brief look at the conventional wisdom in this area:

Myth #1: Nonprofits don't go to scale (get a lot bigger) because they lack the vision or the ambition

The reality here is that the dominant capital markets for nonprofits -- government and foundations -- actively work against nonprofit growth.

Regarding foundations, the common funding policy of "one smallish grant per organization per year" means increased volume doesn't lead to larger foundation grants. In fact, when nonprofits grow, many foundations become less interested in them. A commonly stated reason is "we want to feel where our size grant can really make a difference" . . . which often translates to: "we feel better funding organizations where we are one of their most important funders."

Government -- overall the biggest funder of nonprofits -- is not only the biggest engine for growth but also the biggest barrier to growth. Most community nonprofits . . .

Six Dos and Six Don'ts with Social Media

Are you sick of people telling you a hundred things your nonprofit should be doing with social media? (We are.) Wouldn't it be nicer to be told what NOT to do so that you can feel good about not doing it?

For a change of pace, we talked with Kaitlyn Trigger, Marketing Director at Rally, a startup developing online tools for fundraising. Her unconventional tips:

Ultimately, understanding yourself and your audience is more central to a successful social media presence than mastering the minutiae of Facebook, Twitter, and YouTube. Nevertheless, there are a few guidelines that can help you maintain good social media "hygiene" and avoid shiny new distractions:

1. Facebook tabs

Don't: Spend time developing fancy content for Facebook tabs. People rarely visit them, because they're too busy hanging out in their newsfeed.

Instead: Try using Facebook tabs for . . .

Nonprofit Tax Quiz

Everyone talks about the weather, but how many of us actually know what a lenticular cloud is or what the dew point means? In the nonprofit sector we throw around tax opinions, but here's a chance to learn something (uh oh). We loved working with Kim Klein of "Talking About Taxes" on this fun quiz.

We advise you to take this 17-question quiz with your friends or co-workers before looking at the answer sheet. (Hint: it's easiest if you print out the Quiz.) At the end of this article is a link to a print-friendly pdf of the quiz, the answer sheet, and the scoring guide.

1. If you give a nonprofit 501(c)(3) $10,000, how much less will you pay in federal taxes (assuming you itemize and are in the highest tax bracket)?

a. $10,000
b. $3,500
c. $1,500
d. $10,000, but only if you . . .

Regrets of a Former Arts Funder

As Program Officer for Arts and Culture at the San Francisco Foundation, I and philanthropic colleagues often bemoaned how fragile many culturally specific organizations were. One person would wonder why there were so few financially stable African American arts organizations. Then a multi-voiced litany of woes would commence about how many Asian and Latino arts nonprofits were floundering in just as weak a state.

How was this possible in a community that has no "majority culture," that has had a Hotel Tax Fund giving decades of operating grants to culturally specific arts organizations, and a Cultural Equity Program since 1993 created to redress inequities in funding?

And sadly, at the national level, arts organizations from disenfranchised communities are no more stable. Few African American, Latino, or Asian theater companies founded in the 1970s are still in existence, or if they are alive, they do not appear to be as artistically vibrant . . .

The Trouble with Turkey

If there's one day when socially conscious do-gooders can be excused for letting the cares of the world slip away in a haze of tryptophan, it's Thanksgiving. As major holidays go, Thanksgiving is remarkably worry-free, its main focus neither commercial nor ceremonial in nature. You don't have to come bearing gifts. You don't have to dress up. You don't have to stay up till midnight. Even religious worship is usually not de rigueur, unless you count prayer at dinner.

Honestly, unless you're the host, all you have to do on Thanksgiving is show up, watch football, and, well, eat. Right?

Ah, if only it were that easy.

Endorsing Candidates. Illegal. How to Do It.

Perhaps the most effective way to bring about social change is to elect the right people. Yet nonprofit 501c3 organizations are prohibited from supporting or opposing candidates running for office. Some long-time nonprofit practices address this restriction, but are seldom discussed in public. We bring these practices -- and the reasons for them -- to print:

Nonprofits can take stands on policy issues: we all know this. Our organizations can take stands on local issues (such as zoning changes), state issues (education budget), and national issues (immigration reform). We can write policy briefs and letters to the editor that advocate strongly for or against any proposed law or policy. We can lobby legislators and we can encourage our constituents to write their senators (within wide limits). We can organize a march on City Hall. But we can't say, "Our organization endorses Joe X for senator." Nor can we say, "Vote out Senator Joe Y."

In other words, we are legally able to do many kinds of political work, but not the most effective: endorsing and opposing candidates.

For decades many nonprofits have worked around these rules, taking careful, strategic steps for two reasons:

  • To influence voters in their constituencies to vote for a particular candidate
  • To establish a relationship with a candidate that will be useful once that person is in office

If we want to be effective with legislators in office, we'll be a lot more effective if we've helped them get elected. As one executive director of a national women's rights organization said recently in New York, "You can't lobby 'em if you didn't help elect 'em."

We talked with three nonprofit executive directors (in addition to the one quoted above) about the importance of endorsing candidates and how to do it legally . . .

In Defense of Strategic Planning: A Rebuttal

Mike Allison is one of the leaders who defined strategic planning for the nonprofit sector, and he continues to expand and develop his thinking and practice in the area. We're delighted to have his rebuttal to the article in the last issue of Blue Avocado, Strategic Planning: Failures & Alternatives:

I am an unapologetic advocate of traditional strategic planning.

I have to admit I am not a disinterested party in this debate. As a consultant with nonprofits for the last twenty years, much of my work has been done under the umbrella of strategic planning. I continue to do this work because I believe strategic planning is both necessary and provides a unique contribution to nonprofit organization effectiveness. In this piece and from this perspective, I respond to some of the major complaints about strategic planning that were outlined in Blue Avocado's critique.

Strategic planning is made irrelevant by major shifts in the environment.
Funding was cut for some of my clients by 20% to 40% in 2009. In the cases where these clients had recently completed strategic plans, they had frameworks that were incredibly helpful in making a series of very difficult decisions in a short period of time. Why were these frameworks so helpful? Because . . .

Strategic Planning: Failures and Alternatives

Here is Part 1 of a two-article series on strategic planning and alternatives to strategic planning.

Strategic planning swept into the nonprofit sector in the mid 1980s. Nonprofits were becoming seriously interested in management techniques, and strategic planning -- along with meeting facilitation and fundraising training -- was a focal point for that interest. Twenty years later, today no organization would dare say it doesn't have a strategic plan.

As the recession deepens, many nonprofits now have strategic plans that they can't move forward on. Those plans aren't helping them figure out what to do instead.

And even before the economic crisis, there has been widespread grumbling about strategic planning. Too often dozens of meetings fail to produce new insights. Nonprofit staff are often frustrated that "the strategic plan is never used," while many board members feel the strategic plan is simply a validation of what the staff is already doing or has decided. Executive directors often get going on new ideas long before the strategic plan is adopted, and by the time the document is finished, it can feel like old news.

Organizations often undertake strategic planning "to get board members engaged" or "to get everyone on the same page," objectives which could be reached in much more efficient, productive ways. Meanwhile, consultants make money (one nonprofit consulting firm charges $200,000 for a strategic plan), and foundations -- for whom the plans are mostly written -- read the plans with eyes glazing over.

This is not to say...

Get Thy Nonprofit Self Into Therapy!

For those who are interested in learning more about psychotherapy, Elizabeth Sullivan provides a good overview of the assistance it can offer. It's important to remember that there is a wide continuum of what people need or get from therapy and that results and timelines, of course, vary by person. It may not even be therapy, but, for example, coaching or mentoring, that's more appropriate to your needs. But that's a different article all together.

I worked most of my career in nonprofits, but I experienced so much dysfunction -- including my own! -- that in 2007 I decided to train as a psychotherapist.

The very dynamics that motivate us to change the world can also create unnecessary personal, psychic suffering and result in a need for psychotherapy for some. Many of us hold ourselves to an ethic of sacrifice and self-deprivation as well, often stemming from some variety of guilt or survivor guilt. Of course, we have clear, ethical, intelligent reasons to change the world. But we need personal freedom in addition to social freedom.

Top 7 reasons nonprofit people may find therapy helpful . . .


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