Thursday, December 28, 2006


No Comment
by pam ashlund

On December 27th, my nonprofit blog, the Nonprofit Eye, had 39 page views. On the same day, my blog about my car, Boxster Heaven, had 440 page views.

Tuesday, December 26, 2006


Nonprofit Image Problem?
by pam ashlund

Life has a way of being just plain embarrassing sometimes. I've been in accounting since the '80's. As a manager I take my job and it's concomitant responsibilities very seriously. I work hard to achieve due diligence, as any good financial manager would. Along those lines, I keep up on the body of work on the subject of Fraud Detection.

Here's the rub: Call it vanity, call it a mid-life crisis, call it treating myself to one big splurge.. I bought a sports car this summer. Oh the shame. I love this car so much true, but how embarrassing in the nonprofit world. I know I should be driving a Prius d--n it.

I document my love-hate relationship with this car on my blog: Boxster Heaven

How do these two topics converge? The IT Compliance Institute (the self-proclaimed "Global Authority for IT Compliance Information") has a great article called Best Practices: Ten Tips for Fighting Corporate Fraud. And #7 on that list is:

Look for behavior changes and ostentatious acquisitions
Is someone driving a fancy car or living in an opulent house that they reasonably should not be able to afford? Are they suddenly taking expensive trips? Has their lifestyle changed inexplicably and dramatically? You’d think fraud perpetrators would take pains to hide their new wealth, but many don't work that way, notes Summerford. “The fraud remains hidden, but once they have the money, they spend it,” he states.

My boss laughs at me, but I keep qualifying my purchase with "it's used" or "it's the same price as my Outlander was!" or "the bank owns it not me" or "the boxster is the poor mans porsche!". All 100% true and all because I am so darn defensive because of the common wisdom of "driving a fancy car is a warning sign of fraud". I even "disclosed" it to our auditors preemptively. I felt kind of lame.

The flaw in the logic is this, some people work hard for what they earn, they earn a fair market price (or below), and they decide what they use that salary for. Scary and controversial I know. I always was a rebel. Maybe a vapid YUPPIE rebel, but who's counting?

What are the ten tips? Read the full article at: Ten Tips for Fighting Corporate Fraud
  • Set up a hotline for whistleblowers and tipsters
  • Educate frontline managers
  • Fortify wisely
  • Use a broad approach
  • Look for the triangle
  • Look for anomalies
  • Look for behavior changes and ostentatious acquisitions
  • Monitor e-mail
  • Follow up
  • Be brave

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Friday, December 22, 2006


8 Days for Charitable Giving in 2006
by Pam Ashlund

You know, I've never seen a holiday fundraising appeal which really focused on tax-time. Maybe smiling children are more appealing than a write-off to a giver...or maybe not!

Here's a re-cap on tax-exempt giving:

Beth's posts on Fundraising Widgets and on Donor Documentation

Pam's post on IRS Regs, Tis The Season to Be Giving

David's post on the great Tax Advantages of Giving Gifts of Stock

The IRS's Roundup of Tax-Exempt Giving

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(originally posted 1/25/06 and cross posted on El Loro)
by pam ashlund

This post is the first in a series on censorship, free-speech, and the power of ideas

Are nonprofits censored or controlled by government funding?

After 1989, if your nonprofit accepts a federal contract of over $100,000, you are subject to the Drug Free Workplace Act. In a "Drug-free workplace", the employer has taken steps and initiated policies to ensure that employees, vendors, and customers are not:
  • taking or using alcohol or drugs,
  • selling drugs, or
  • affected by the after effects of indulging in alcohol or drugs outside of the workplace during non-work time.
Here's the funny part: Does the Act require employees to do drug testing? Nope. Does this mean if we are implementing a drug testing program to comply with the act that we are censoring ourselves? Maybe so.

Just as an examination of anti-depressants can easily turn into a conversation about the nature of the self; or to the spectre of a society ruled by drug induced contentment (or dare I say happiness) turn into a discussion of governmental mind control? How soon after asking the question “what exactly is the difference between using alcohol or using cocaine or marijuana?”, does the conversation become a polemic on why the government spends billions of dollars fighting the war on drugs? Once you get there, you are only a hair away from joining the conspiracy theorists.

The problem with letting the little problem become either philosophical or political is that you risk loosing credibility.

Feel free to talk about how serotonin levels change in a group of subjects taking an SSRI, but ask which is the real you-- “the depressed, angry cynic” of before or the “cheerful, open, calm” person after—and you are in for trouble. In trouble because--it makes people uncomfortable. No one wants to be happy if it is “just” because of a drug.

“But it isn’t real” I hear time and time again. Why do you use the modifier “just” I would ask. “How do you define real?” etc. etc. I might as well be the mad hatter for all the agreement I've received.

Speaking the unpopular is the same basic mistake Galileo made. If he had stopped with some diagrams and theories about the planets revolving around the sun he might not have raised the hackles of the Church. If he had stopped there he wouldn’t have been very different from Copernicus. Instead he “went political”, making comments to the effect of:

“the Bible is written in the language of the common person who is not an expert in astronomy.”


“Scripture teaches us how to go to heaven, not how the heavens go.”

(quotes from “The Galileo Project”). Obviously he was crusin’ for a bruisin’ .

An aquaintance (and I cannot confirm this originated with him) defined culture as “An unwritten set of rules, which serve no necessary function, but if not followed, result in being ostracized from the culture.” He used as examples “eating left handed in the Middle East” and “having anything other than a 'positive attitude' in the US”.

The first resonates because we have distance from the other culture, the second is abrasive because we have no distance from our own culture. Most of us do take for granted that “having a positive attitude” is a desirable thing and from the perspective of a person from another culture (the French let’s say) this is viewed as patently ridiculous.

My question tonight: how far can you push the envelope before they either ostracize you, jail you, or just plain kill you???

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Wednesday, December 20, 2006


You've heard of SOP-98-2 right?  

SOP is acronym for "Statement of Position". Today we're talking about SOP-98-2 or "Accounting for Costs of Activities of Not-for-Profit Organizations...that include Fund-Raising."

SOP-98-2 has been effective since December 15, 1998 and applies to all fundraising activities of NPO's and to state and local government entities although most nonprofit managers haven't heard of it, we've been subject to this rule for over a decade.

"Accountability" "Misleading the Public" "How much of your donation goes to the cause". These topics have receive a lot of media play. Your donors want to know "if I make a one dollar donation, how much will go the cause?  Typically the answer is 75 to 85%. Most folks would be okay with knowing that 80 cents of your buck go to the cause, yes. But what about the cost of fundraising?

If you use a professional fundraiser, it's possible that instead of 80/20, it might be 20/80. If professional fundraisers use full disclosure to the donor they might even be within the confines of the law (laymans speculative opinion). But who would give 20 cents out of every dollar to a cause?

The answer: maybe your nonprofit. Nonprofits are expert at disguising the real costs of fundraising as "general administrative". The blur between job duties opens that door. In a small nonprofit, everybody might be pulling double-duty.

If we consider the real cost, maybe professional fundraisers are just more honest. I myself like the idea of sitting back, doing no work whatsoever and picking up a check from the profession guys. No midnight hours blowing up balloons, no garning silent auction gifts that rarely (if ever) pull the kind of bid they deserve, no more print "ad books" that may or may not even pay the cost of the printer.

Then there is the self-disception that comes after. How many times have I heard "Our fundraiser is so incredibly successful, we raised $1 million dollars!" only to find out that they were talking gross, not net! How much did you spend on the event? I ask. On hearing the answer, I say "Oh, so you really raised $200,000" or something to that effect.

How does all this connect to SOP 98-2? Bottom line, 98-2 is attempt to clarify how a nonprofit should (must) handle the overlap of fundraising costs with education or administrative costs.

Accountants call this overlap a "Joint Activity". SOP 98-2 requires that allocation methods be rational and systematic, result in reasonable allocations and be applied consistently by NPO's given similar facts and circumstances.

The problem? It provides no detailed guidance on how allocations should be calculated or which methods should be used.

if you are going to mix the purposes of fundraising or program info, if you aren’t careful you need to allocate the entire cost to fundraising, and you have to prove that there is an educational content (in that case % fundraising or Direct Mail Association

When your nonprofit makes a solicitation (for example sends a newsletter out with a return envelope for potential donors)that activity is referred to called a joint activity. The criteria: purpose, audience and content. If the activity does not meet all three criteria SOP 98-2 requires the nonprofit to report any costs of a joint activity as fundraising.


How to Report a Joint Activity

Tools for Nonprofit Mailers

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Tuesday, December 19, 2006


The Challenge of Working For (and Staying in) a Nonprofit Job
by pam ashlund


Why did you start working for a nonprofit? Me? In a nutshell, I joined because I found no meaning in helping someone else make money. After college I suffered a few very empty years. I worked for a property management company, and I was miserable.

I couldn't figure out how to inject meaning into my life and I figured either I start selling somebody else's shit, or I went to work helping people. It seemed like a basic "either-or" "good or evil" question. I choose the good.

But since I work in finance and management...I didn't immediately find meaning. When I did it wasn't because I was helping people (or helping the people who help people). It was because I found my passion. I LOVE teaching, coaching and mentoring (i.e managing a team and supervision). I LOVE figuring things out; automating meaningless tasks, producing fantastic and useful data, designing reports that solve problems (i.e. data mining, report writing). I LOVE driving a process past the barriers of bureaucracy, past inertia, past ACTION.

I found out that I'm a do-er. The only hitch I ran into was internal. I am driven by approval. Yes, maybe we all are...but. I found out that the things I excel at, that I really LOVE, are not really understood by too many. I exist on a quiet plane, rarely "met" by other minds. Sometimes someone catches a glimpse of my talents and when they are impressed, I just beam.

Accounting, Management and other Administrative tasks are pretty much thankless jobs. A sense of noble superiority doesn't really satisfy. And nobody is going to nominate you citizen of the year no matter how your work shines. And in nonprofits there is no such thing as a performance bonus. They are often disallowed by funding sources; or worst still, looked upon as some sort of moral lapse.

Now how is a nonprofit going to retain a talent when there is no carrot? The answer:

  1. it doesn't even get the talent to begin with; or
  2. if it does (often by getting the young and eager), it doesn't keep them.
The result? Nonprofit organizations are left with mediocre leaders who then promote themselves up the ladder. They then can't afford to leave and stay till they retire and while they are there they reduce any talent that comes there way to the lowest common denominator fearing that any talent would be a serious threat that would challenge their job security.

Do I sound burnt out? I don't feel that way. I feel passionate. I feel committed. I feel resolved to be an agent of change. I feel like challenging myself. I feel like changing the world.

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Sunday, December 17, 2006


I get so bored with the same old nonprofit themes at the same old boring conferences and the same old boring nonprofit rags. Yawn.

If those are the yawns, the nonprofit bloggers are the antidote. Inspiration is as close as an RSS feed.

And today I came across a new (to me) voice: Where Most Needed. Written from an Operations perspective, the blog covers topics ranging from accountability, performance measurement to fraud detection.

Last week's article announced the death of nonprofit accountability in a post titled "Accountability is So Last Year". The post suggests our funders will be nudging us to "transcend" accountability next.

I've been fretting about preventing nonprofit burnout, staying off the IRS radar, how to reduce dependance on government funding...but's time to work on transcending accountability!

In California, the Nonprofit Integrity Act was only passed last January, 06, but it's time to move on folks! Seems even Accountability is yesterdays news.

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Saturday, December 16, 2006


Follow-up to Dec. 9th post on Social Enterprises

I admit it, I have an unabashed love for Harvard Business Review! Why? Because I love a well constructed argument, because I love to see nonprofit issues explored with laser-focus, because I'm a nerd, because, because. Alright already, judge for yourself. Back in 2005, they published an article "Should Nonprofits Seek Profits?". For only six dollars you can download a reprint of the article for your Executive Director (or your organizations biggest proponent of launching a for-profit business venture, maybe someone on your Board???).

In case the title isn't enticing enough, here's the description they offer:

Nonprofits increasingly feel compelled to launch earned income ventures--not only to appear more disciplined and businesslike to stakeholders but also to reduce their reliance on fundraising. There's plenty of hype about the value of earned income ventures in the nonprofit world, but such projects account for only a small share of funding in most nonprofit domains, and few of the ventures make money. ... when the authors examined how nonprofits evaluate potential enterprises, they discovered a pattern of unwarranted optimism. ...potential financial returns are often exaggerated, and the challenges of running a successful business are routinely discounted. ...the biggest downside of such ventures is that they can distract nonprofit managers from their core social missions and, in some cases, even subvert those missions. There are several reasons for the gap between the hype and the reality. One is that an organization's nonfinancial concerns--such as a desire to hire the disadvantaged--can hamper it in the commercial marketplace. Another is that nonprofits' executives tend to overlook the distinction between revenue and profit. ...Earned income ventures do have a role in the nonprofit sector, the authors say, but unrealistic expectations are distorting managers' decisions, wasting precious resources, and leaving important social needs unmet." (emphasis mine)

I couldn't have said it better. To purchase the full article from the Harvard Business School Publishing website, click here.

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Wednesday, December 13, 2006


For the fourth consecutive year the poverty rate rose, from 12.5% in 2003 to 12.7% in 2004. The number of people in poverty increased also, by 1.1 million, to 37.0 million in 2004.

37 million people in poverty? In the US? Yep.

"How much can a person make and be "in poverty"?" you might ask.

According to the US Census Bureau, the 2005 Poverty Threshold, without going thru charts and tables, this is how it breaks down:

One Person - less than $10,000/yr; Two Persons - Less than $13K; Three People - Less than $16K; Four People - $20K; etc. etc.

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Tuesday, December 12, 2006


Read an exciting article on disaster recovery the other day (I know, I know, proof that I have NO life!)...I came across info on the life expectancy of various digital storage media... average life of a diskette - one year, average life of a CD - ten years - average life of magnetic tape - tops 50 years. All of these involved storage in ideal conditions (temperature controlled, stored vertically, dust free, etc.

Since the advent of the digital age, more and more knowledge is stored electronically, often with no physical counterpart. We take photos with digital cameras, save them on unbacked up hard drives or worse still leave them on the tiny cards that come with our cameras. We write novels and store them on flash drives. We leave these flash drives dangling from our key chains or stuffed in our backpacks.

By way of example, a friend stored all the family photos on a server and in the time it takes to say "power surge" they were gone. No more baby pics. His wife learned from this, and now nothing can stop her from ordering prints from Walgreens. She says it is just comforting to have it in your hands--that digital info. is just too fragile and non-corporeal to rely upon (alright, I admit it, I paraphrased; she didn't use the word "corporeal" but I'm sure that's what she really wanted to say!).

When I first saved a document on a computer, I didn't fear it. I regarded it as a modern day miracle. Finally permanent archive--a way to organize and above all KEEP all of my writing. No more paper that would crumble to dust, no more file folders too lose, no more headaches. Ha ha. Ah the innocence of that comfort.

On the other hand, the Rosetta Stone? 2200 years! I'm thinking of taking up carving.

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Saturday, December 09, 2006


Went to a Garden Party: Social Enterprise, Earned Income, or Profit
by Pam Ashlund

Los Angeles, CA

Dec 4-6

Attended a three day workshop at the Grantsmanship Center this week. The topic? “Earned Income Strategies”.

Although I couldn’t begin to summarize the three days of info in one post, I think we are all familiar with the risks of income strategies:

  • Lose money, damage reputation, hurt morale
  • Mission Drift - Get successful and: lose track of your mission
  • Funders move on (think you don’t need them anymore)
  • Become vulnerable to attack on the unfair competition front
And of course…
  • the dreaded Unrelated Business Income Tax (UBIT)

My take-away's from the meeting:

  • Any idea would not succeed without a motivated champion of the venture
  • Don’t confuse “earned” with “unrelated”
  • Proceeding on ventures without clear goals is a recipe for failure (corollary: starting without a business plan is “flying without a net”
  • The best nonprofit success stories involve a blending of the purpose of the organization and the business enterprise;
  • One excellent reason to engage in earned income ventures is that they create new income streams that could fuel building organizational capacity, but there’s a chicken/egg problem, you might have to build capacity to make the venture a success;
and last
  • The biggest barrier may be our own internal bias; that we’re in business to do social good, and that any kind of money-making enterprise might not be toward that good; or that business itself can never be good (not counting Paul Newman’s spaghetti sauce!)
This last point (our own internal barriers) gave me the most to think about.

The primary fallacy being that the social good is somehow better served by providing all services for free. To believe that perhaps participation could actually increase when clients must pay for a service is still a radical thought. Our presenter explained that the stigma of taking charity (being on the dole, etc.) is so great that many wouldn’t take it as a matter of pride and principle. It’s "the American Way" to want to pull ones own weight.

Another thought provoking question raised: is it a mistake to charge so low that it doesn’t cover the cost of what you do? Since nonprofit programs are so often subsidized with government funding, it may not be a necessity to ask that question. But…how could it hurt? At a minimum,
we need to find out the real costs of providing our services. How else can we assess the cost-benefit of our endeavors?

One other barrier (and for some this might be the toughest to combat): if anybody is unhappy with the idea of launching a social enterprise, if we receive even one complaint or question (from the public, our board or our funders)…do we just bring the whole process to a halt?

This is the chronic attitude of the helpers among us. Do we have to please everybody?

Although this may not be completely on-point here, I feel compelled to quote Ricky Nelson:

It's all right now, I learned my lesson well.
You see, ya can't please everyone, so ya got to please yourself

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Monday, December 04, 2006


I'm a big fan of the "Don't Tell the Donor" blog. Where else can we get an insiders look at nonprofit fundraising confessions? This anonymous blogger, known only as "a fundraiser" is apparently a Blackbaud Raisers Edge user.
"A fundraiser" has me (again) pondering the sad cross purposes of fundraising and finance. The two should be like body and mind--inseparable. "A Fundraiser", in a December 1st post titled "Projections, predictions, and the problem of past performance", confides: discourages me when I hear fundraisers who feel they do not have a responsibility to provide cash flow projections and predictions to the finance teams.
It seems obvious that finding a resolution to these problems could only make us more effective. Accordingly I offer a few thoughts of my own, hopefully they'll get us a little further in that direction:

Accountants are bound by (at least) three guidelines:

1) Generally Accepted Accounting Practices (GAAP)
2) The Accrual accounting method
3) FASB 116

To accountants these are "obvious", to fundraising staff (or the general public for that matter) they may remain mysterious and arbitrary.

On the other hand, when an organization has a fundraiser, fundraising staff may count expenses as the occur, but consider the total income only when the event is over. The result (known as the "cash method" of accounting) may be that the financial statements just don't agree with the numbers in fundraising.

What we have here is a failure to communicate!

The tendency may be to abandon all hope and just keep (and refer to) separate records.

The solution? Accountants have no trouble creating a "cross fiscal year" report to reconcile the numbers with those of fundraising.

A simple briefing on accounting terminology and a corresponding understanding of the reporting needs of the fundraising folks...and voila...communication.

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Sunday, December 03, 2006


Ask And Ye Shall Receive: Error 404 File Not Found
by Pam Ashlund

Before my fingers had left the prayers were answered. If only I could tag a webpage and know it would still be there when I returned! While I've been tagging used for a few weeks, I came across another service: Ma.gnolia. I finally got around to importing my bookmarks to Mag. today and was just browsing around, reading the FAQ files, and what did I find? This:

When you add a bookmark to Ma.gnolia, we rush around in the background to save a copy of that web page for your future viewing. Never again will you be lost if a web page moves or gets deleted. Ma.gnolia's saved copies have got you covered, so that what you find stays found.

Would I be pushing my metaphor if I said 'I was lost but now I'm found'? Okay, how did Ma.gnolia handle the legal/ethical dilemma?

How does Ma.gnolia treat controlled content when making saved copies? Ma.gnolia only makes a saved copy of a web page when directed to do so by a user. We do not crawl the web and therefore you will not find us checking robots.txt. We do, however, watch and respect the ‘no cache’ meta tag should a member attempt to make a saved copy of a protected web page. Additionally, we do not cache images, CSS or Javascript in our saved copies.

Problem solved? I guess I won't know until they dissapear three years from now!

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Saturday, December 02, 2006


The Temporality of Digital Knowledge
by Pam Ashlund

The nonprofit community has a wealth of information online. Advice from Fundraising to Finance. Whitepapers, ToolKits, Articles. A collective knowledge that could never be found in one book (or ten books for that matter). What worries me is that the owners of each piece of this databank have no commitment, responsibility nor mandate to leave this information on line.

When a website closes, the data goes with it. When a newspaper archives its free material, it is either gone or pay-to-play from that point forward. At the moment this information is all available at a click, but it is not centralized and its very existence is oh so tenuous.

As anyone who has bookmarked or tagged a reference URL has discovered, upon returning to the link, the site is no longer there, the article has been moved, or resides behinds a closed door. These broken links are a fact of the electronic age.

The ethical dilemma: make sure this data doesn't dissapear by saving this material--knowing so much of it maybe protected by copyright, or permission to use only, or...just not owned by the public period.

But the fact remains, they are there now, and I for one, don't want to lose them!

Yes, the search engines may have cached the page; and might take you back to an older version of a website. But I now have thousand's of pages bookmarked, favorited, or tagged...and I depend upon that information. It is now my encyclopedia, my file cabinet, my everyday work resource.

I'm not proposing new legislation here, but rather the quest for a solution. Maybe a volunteer effort to archive this fantastic, but vulnerable virtual library. It would be a shame to have to continually re-create the wheel everytime a user gets tired of administering a website.

This is my battlecry - save our on-line nonprofit resources! Otherwise all the social bookmarking in the world won't matter.

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