sponsored by
editors and readers picks
Six Things Every Board Member Should Know About the NEW 990
Email
Print
Just the thought of an IRS form can bring out the clouds on a sunny day. But now that this annually required nonprofit form is on the web for everyone to see (at GuideStar.org), it goes beyond compliance to being an important way to tell your organization's story.
Federal Form 990 from the Internal Revenue Service (IRS) is like a tax return for nonprofits, but since we are tax-exempt, it's called an "information return."
You may have heard by now that the IRS Form 990 has been substantially revised for the fiscal years beginning in 2008 and in the future. The issues disclosed on the form that especially interest the media, potential donors, and the general public still include executive compensation and overhead costs, but with this revised form, the
> Read moreIn Search of Unicorns: Finding & Hiring Grantwriters, Part 1
Part 1 of 2
My small agency can't afford to hire a full time fund developer. How do I look for a grant writer? I have talked to a few who either want to be paid by the hour or receive a percentage of the grant. I am perplexed. Any suggestions?
--Wes Mukoyama, Yu-Ai Kai, San Jose, California
Everyone's heard of unicorns, but almost no one has ever seen one. Like Wes, almost everyone in community nonprofits thinks it would be great to have a grantwriter. But it's rare to find and work successfully with this rare creature. Why is it so hard?
In this issue of Blue Avocado we'll explore why hiring grantwriters seems to be a hit-or-miss proposition, and what to think about doing instead. In our June 1 issue, Part 2 will lay out a blueprint for finding and contracting with outside grantwriters.
Why it doesn't work very often
Community nonprofits have a harder time succeeding with grantwriters than
What Should We Do About an Employee's Outrageous Blog?
Dear Rita,
An employee googled our nonprofit's name and came across a coworker's blog. The blog contains some outrageous material, including some unflattering comments about working at our organization. What can our nonprofit do? -- Blog-Burned
Dear Blog-Burned:
> Read moreLoans From Nonprofit Board Members
In many nonprofits, a time comes when the question arises: should
the organization accept personal loans from board members? This article does not try to answer that question. It does try to outline - very briefly - some of the choices in how such loans can be made. Use this article as a starting point for a discussion with the board or a discussion with your personal financial advisor.
Board members have often lent crucial funds to their organizations, making it possible to get through a temporary cash shortage or get started on a new venture, and have been paid back promptly. But there are also examples in which loans from board members have led to resentments and accusations, and the loans are not repaid to some or all of the board members. In short: a loan from a board member is a risky venture.
This article discusses five types of loans from board members: unsecured loans, secured loans, guaranteeing a loan or line of credit, pooled loans, floating endowments, and issuance of bonds.
> Read moreAsk Rita: Facing an Immigration Quandary
Dear Rita: Our organization recently got letters from the Social Security Administration (SSA) informing us that two of our employees’ social security numbers do not match with the social security database. We want to keep these employees; what should we do and what are the risks? - Baffled Boss
Dear Baffled:
Immigration law enforcement is not only a hot political issue; employers of all kinds are also feeling the heat. An employer that does not comply with the Immigration Reform and Control Act (IRCA) by verifying that an individual is eligible to work in the U.S. can be subject to fines of $110 to $1,100 per employee and criminal sanctions in egregious situations. Just because you've received this letter doesn't mean . . .
Click on "Read More" to see Rita's full answer along with a Three-Step Immigration Compliance Checklist
> Read moreThe M Word: A Board Member's Guide to Nonprofit Mergers
The M Word: A Board Member's Guide to Mergers
How, Why, and Why Not to Merge Nonprofit Organizations
by Alfredo Vergara-Lobo, Jan Masaoka, and Sabrina Smith
Published by CompassPoint Nonprofit Services
Made possible with funding from The San Francisco Foundation
Download the pdf by clicking below.
The 411 on Starting a Car Donation Program
Does your radio station advertise for car donations? Blue Avocado reader Eric Haynes knows all about it – his Kansas City nonprofit accepts car donations and he's here with the inside story and how - surprisingly - to make it work on a modest scale for you:
Do you remember your first car? As I approached my 16th birthday, I daydreamed about the hot rod that would rocket me to the top of the high school social order, and rock my nights with its hi-fi stereo system.
My dad, on the other hand, had no consideration for my social status – he found me a rusting station wagon! I nearly gagged at the sight of the oversized nerdmobile.
Families greet their teenager’s first car with excitement and trepidation; nonprofit people receiving their group’s first donated car often feel much the same way.
While there are the large, national organizations that liquidate thousands of
> Read moreNonprofit Layoffs and Furloughs: Do Them Right
Dear Rita: It looks like we're going to have to lay some people off in the next couple of months. But the management team is also considering furloughs, a week's shutdown, and other choices. The decision about what to do won't be made by us in HR. But we will need to carry out the unpleasant acts. How can we do these legally and nicely? --Dreading It All
Dear Dreading It All: My sympathies are with you and although it probably won’t help you feel better, many community nonprofits are in the same boat. And your attention to the HOW is important: how people are laid off (or hear about pay cuts, etc.) makes a big difference in how the departing staff feel and how the remaining staff can move forward in a positive way. Each group has to assess what works best on their own particular boat, but here are some things to think about:
> Read moreWhen You Lose Your Health Insurance Coverage
With 46 million Americans lacking health insurance, health care is a society-wide crisis as well as a personal, individual one, and there aren't ready solutions on either level. Steve Zimmerman provides a couple of tips if this is an issue that's come home to you:
When Francine, a 30-year-old program assistant at a Virginia domestic violence task force recently found out she was being laid off, the shock sent her mind spinning. It didn't take her long to wonder, "How will I pay for health insurance?"
Like most laid-off employees, Francine's initial reaction was that the smart thing to do would be to continue her insurance through the task force. But with a little legwork, she came up with a surprising alternative that saved her more than $100 per month.
> Read moreLaid Off From a Nonprofit: Me!
A First Person Nonprofit story:
Nearly two months ago, I joined the ranks of laid-off Americans. It almost makes 
me feel Patriotic, somehow Special, to be counted among the group considered most newsworthy, 24/7. The news is filled with stories about us: How will these laid-off folks manage? How will they afford health coverage? More important to the economy, How Will They Go Shopping?
It's not as if my own layoff came out of left field: for months, like other nonprofits, our health services organization had been suffering from declining donations. Hints of coming changes were everywhere: a sudden rush of closed door meetings at unexpected times, hush-hush conversations in the hallways, cancellation of the
> Read moreAnd Now for Something Different About Nonprofits and the Economy 1/1/09
Unhappy New Year! . . . as the chorus of nonprofit discussion seems to be singing. As if we don't need more troubles on top of the ultra-negative projections about the economy, the advice about what nonprofits should do is depressingly empty. Whenever we see something like "Fundraising in Challenging Times," we feel compelled to read it. What if the answer's here?! But after reading these articles and hearing these speeches, we feel, well, unsatisfied.
Scanning dozens of "what to do" lists recently, their lack of nutrition seems to fall into three groups. A lot of the advice is pious and too abstract: "Focus on the mission" or "Be strategic." I'm reminded of a nonprofit exec from the for-profit sector who reflected that she had given out such advice as a board member and then, when receiving it as an executive director, couldn't believe how obnoxious it was. Other suggestions such as, "Monitor expenses closely," and "Delay the start of capital projects" are good advice but kind of "duh." And then there's the good advice (like "Diversify your revenue streams") that's good advice the same way "lose weight" and "achieve inner peace" are good advice: the reason we aren't doing it isn't because it hadn't occurred to us.
As is too often the case, the advice from the philanthropic-consultant industrial complex (PCIC!) is enough to make a person depressed or even angry. I heard a well-known nonprofit guru tell an audience, "And when we were really stuck about what to do, I picked up the phone and called my friend Al Gore." I felt like throwing a shoe at him! How is this a replicable, usable strategy?
Here are four ideas that might not be better than the others, but at least you may not have heard them before:
1. Declare an emergency. When people have permission to act out of the normal grooves, they can be bolder, more creative, energized, or at least
> Read more
Take a 3-Minute Vacation with Fireworks
We wanted to start 2009 with a pyrotechnic display . . . here are three ways!
- Create your own on-screen fireworks display.
- Buy a scented candle and light it in your cubicle, office, lobby . . . instant aromatherapy!
- Watch fireworks artist Cai Guo-Qiang create a painting through fireworks (he did the fireworks for the Beijing Olympics opening).
Sarbanes-Oxley and Nonprofits: Bogeyman in the Boardroom?
Somehow, all the publicity about Sarbanes-Oxley made it seem as if
this legislation applied to nonprofits, too. But contrary to what is frequently thought (and said in nonprofit boardrooms!), Sarbanes-Oxley is not applicable to nonprofits, albeit with just a couple of exceptions. In other words, there are a couple of small points to note(templates later in this article), a lot to relax about, and a lesson to be learned in nonprofit leadership.
You may remember that this multi-component legislation (nicknamed SOX) was passed by the U.S. Congress in 2002 in response to a large number of for-profit scandals involving Enron, Tyco, WorldCom, Arthur Anderson, and others. Extreme fraud, conflicts of interest on boards,
unethical executive compensation practices, and improper auditing led to the failure of these mega-companies and deep, negative impacts on consumers, shareholders, employees, and many other individuals and institutions.
In response, Sarbanes-Oxley set in place a number of required processes for publicly held corporations (corporations that issue stock to the public), of which the best known may be the requirement that the CEO personally vouch for the accuracy of financial statements and that the external audit firm be different from the firm providing financial consulting.
There are only two aspects of Sarbanes-Oxley that are applicable to nonprofits:
> Read moreA 360-Degree Look at the Organization: Seeing Ourselves as Others See Us
Who should judge if a meal is good? The cook? The nutritionist? The restaurant critic? Aristotle had a good answer long ago: "The guest is a better judge of the feast than the cook."
There are 360 degrees in a circle, and the 360-Degree Look places the organization at the center of the circle and looks at it from the viewpoint of its many constituencies. In particular, the 360-Degree Look helps compensate for the board's limited view of how well the organization is functioning. There are several reasons for this limited view. First, board members often have only a little time each month to spend on their volunteer board commitments. Second, board members are often unfamiliar with the program area of the organization, whether that is pesticide research, early childhood development, or nursing home standards. Hopefully, board members do know about the needs and desire of the organization's constituents, but that may not be the case. Finally, board members often receive most or all of their information from the organization's executive -- not entirely a bias-free source.
Time for a Fresh Perspective?
In a 360-Degree Look, the board and the staff management team seek feedback from those who stand around the outside of the circle as well as inside it: clients, the community, volunteers, donors, funders, and staff. While such a project might be seen as threatening or overly time-consuming by staff, it's an infrequent project, done perhaps every five years, or when a fresh perspective is wanted. Having it led by a board-staff task force can alleviate staff fears and create a precedent for such board-staff teams. Like any project, a 360-Degree Look can get bigger and bigger; keep it modest and do-able.
The following steps can be considered as examples of ways to obtain . . .
> Read moreA Priest, a Rabbi, and a Foundation Program Officer Walk Into a Bar . . .
Who said the nonprofit sector doesn't have a sense of humor? We asked Blue Avocado readers to finish the line, "A priest, a rabbi, and a foundation officer walk into a bar . . . " and here are our favorite responses:
WINNER and recipient of a box of fresh avocados delivered to her door!
Joani Shaver, Haven House, Alcoa, Tennessee for her winning entry: The priest orders: a beer. The rabbi orders: a margarita. The program officer orders: everyone to complete a 12-page report detailing the expected impact of their bar experience on the well-being of the whole neighborhood for the next 10 years.
Runners up
* The bartender says to the program officer, "What does a program officer have
in common with a priest and a rabbi? The program officer replies, "We all represent invisible beings that purportedly bestow riches on those that pray to them!" --Anonymous
* . . . and the program officer in the nicest way asks the priest and the rabbi to go back out of the bar and come back in "with a few small changes." Which they do, and she asks again, and they do again, several times. --Jack Hale
* . . . the bartender looks up and asks, "What is this, a joke?" --Michael Kisslinger, North Coast Opportunities, Ukiah, California
Take a 3-Minute Vacation Right Now to a Beautiful and Funny Christmas Concert
It's musical (put your headphones on) . . . it's Christmasy (endure it; it's only 3 
minutes); it's really fun (trust us).
Twelve Days of Christmas by the acapella group Straight No Chaser
Twelve Blue Avocado Days of Christmas
Okay now, boys and girls, sing along!On the twelfth day of Christmas, our board chair sent to me (click on links or see below for key): 
* Twelve folks retiring,
* Eleven doors a' closing,
* Ten boards a' working,
* Nine grants a' writing,
> Read moreSpeed Up the Board Recruitment Process!
Imagine getting excited about volunteering for something, and then waiting six or seven months before you actually get to do it. Can we accelerate the process by "pre-qualifying" candidates?
One of the most frustrating parts of board recruitment is the length of time -- often months -- between talking with a prospect and then bringing him onto the board . . . months during which the candidate usually becomes less interested. For instance, a person might be tentatively asked in January, discussed by the governance/nominating committee in February, have her name brought to the board for discussion in March, officially interviewed/asked in April, elected by
the board in May, and her first board meeting is in July! Some boards . . .
The Secret to a High Impact Annual Report
We nonprofits often put a great deal of time and effort into our annual reports, especially compared with how briefly most recipients will look at them.
"The annual report is a comic book," a nonprofit executive once told me. "They look at the picture and glance at the words." The secret reality is that people do only four things with a nonprofit annual report. They:
- Read The Letter (typically from the executive director and the board chair)
- Check to see if they're listed (if they're a donor)
- Read the captions on photos
- Look at the financials to see how big you are and if you had a surplus or a deficit.
You know it's true! Yet (with the exception of The Letter) these are the areas that are often done at the last minute and without real thought.
So this year, do it differently:
> Read moreSucceeding With - or Maybe in Spite of - Evidence-Based Practices
We understand the reasoning that allows funding only for proven, evidence-based practices. But too often this requirement has become a club battering community nonprofits. Evaluator Clare Nolan explains how to do your best work in the evidence-based minefield:
Safer sex can be a life and death issue. And many nonprofits make safer sex education the centerpiece of their work. But how do they know whether what they're teaching is working - that lives are being saved?
A San Francisco Tenderloin neighborhood had a safer sex education program modeled after a "proven" intervention being promoted by the Centers for Disease Prevention and Control (CDC). But their own expertise with their population led them to want to change the model. That's why they asked me to design a program evaluation -- to see if the model could be changed.
Their education approach was modeled after a "proven" intervention being promoted by the Centers for Disease Prevention and Control (CDC). As part of my background research, I was surprised to learn that the intervention was first shown to be effective among a primarily gay white population in a small Southern city. Would this intervention really be successful at reducing HIV risk behaviors among residents of a diverse urban neighborhood struggling with poverty, homelessness and crime?
This situation reflects a broader trend in the nonprofit sector in which funders encourage and sometimes require nonprofits to use "evidence-based" practices and models. Evidence-based practices (EBPs) are strategies that have been shown through rigorous research to be effective. The premise sounds great. If there's strong evidence that something works, nonprofits should use it, right?
Not so fast. Models and practices with positive track records are a potentially
> Read more
