Sunday, October 21, 2007

THE SCRUTINY OF BEANS

Working in the nonprofit sector it's easy to forget about the resources in the for-profit world. So today, I'm going to recommend poking our heads out into the sun once in a while. I sat down to read a copy of CFO magazine. I figured it wouldn't have a lot to relate to, but was I wrong. Keep in mind no endorsement received, I love this rag!

One article in particular, Finance in History: Here's to the Bean Counters: A slur to finance folks and accountants, the term has a noble past byR.G. Voorhees captured my imagination.

I won't quote it away, but just give you the opening paragraph (emphasis mine):

"Bean counting" has long been an insulting term for what finance professionals and accountants do. Often, it's been used to tar CFOs as transaction processors—a role largely relegated to the back office. What's more, people like to use the phrase to ratchet up the pedestrian aspects of finance by tagging practitioners as "mere" bean counters or "little-more-than" bean counters or "simply" bean counters.

It is not a surprise that this should relate to my last post on IT (and Allan's comment on relegating IT to the backoffice), Giving: Donation or Investment? You decide

The movement toward integration (and mutual respect) is on! I'd love to think I was the first to spot the trend, but I think the CRM's (and even Microsoft) have their eye on convincing us of this new wave. Does that mean we should view it with skepticism? I'm sure. Does it mean it isn't valid? Not at all.



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Saturday, October 20, 2007

GIVING: DONATION OR INVESTMENT? YOU DECIDE

Last week, in MISSION WITHOUT I.T. IS LIKE A DAY WITHOUT SUNSHINE I set out to write  ROI, but before I'd finished my first paragraph, I had revealed my own flawed organizational paradigm.

Allan Benamer contributed a critically important comment:

IT is actually responsible for all the other departments you mentioned (accounting, marketing, etc.) in the best nonprofits?

You really can't do accounting, marketing or fundraising without IT. ...you could try but you'd have a heck of a hard time scaling. Think of IT as an umbrella that keeps all the other departments from getting wet. In the best nonprofits, it should be integrated into every department and not be a standalone.

The only way to effectively address complaints about ineffective organization? Offer a solution. How about this: replace our world of the three overlapping sets: communications/ operations/accounting--with a new world---mission/community/investment.

The catches? If your giving is an investment not a donation, it presupposes that you’ll have a return on your investment (probably more than just the satisfaction it gives you); and that you’ll expect accountability (not just delivery of services).


So, let's shift that paradigm, but brace yourself for the shockwave.



credits: the idea above does not originate with me, I heard some of this in a talk, but I can't find the reference. Anybody know the source? Organizational theory? Drop me a line.

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Tuesday, October 09, 2007

NONPROFIT TRIAGE AND SOCIAL ISSUES

Just read Andrew Taylor's post An Unpleasant Argument. In his post he struggles with donor challenges about how to prioritize the recipients of charitable gifts:
Why should people give to your organization rather than support the poor, the hungry, or the destitute? And why should your donors get a tax break on their gifts?

It reminded me of something that happened during the Katrina disaster. Rescuers enforced triage rules and refused to allow people to bring their pets. Of all of the horrors that occurred during the bungled emergency response, this gave me the most pause. It was a double punch, first you've just lost your home and you've been sitting on a roof fearing for your life and then, forced to leave your family cat or dog to a certain death (drowning or starvation).

I knew, with every shred of logic I have, that the triage strategy was correct. People first, pets second. And there were people everywhere, stranded and dying and desperate. There's no time in that picture to go back for kitty. But...I also knew if I were on that helicopter, I'd get that family pet on the ride. I'd no more take the mother and leave the child.

And I get it, in early response decisions have to be made, and it's ultimately about saving those with the best chance of survival. The given is that everybody isn't going to make it. On that scale of decision making pets don't even make the scale. But...

All of this brings me back to why I started this blog...to explore nonprofit identity. Why do we get a tax-deduction? Do we not get it if our charity isn't deemed noble enough? Do we not get it if we are large like a hospital? If we're financially successful should we stop getting donations?

Would we be human if we gave to the poor but never gave to the arts? Are we inhuman for giving to the arts when there is a hungry child anywhere? Could I leave a puppy behind? There are cold hard truths here, but maybe not the ones that seem most obvious.

It really isn't so simple as to rank priorities. Here are a few anecdotal thoughts: are artists rich (or starving?), does art create hope? does hope inspire us to give? is Michelangelo more important than Mother Teresa (or vice versa)?

I hope when we are asked the tough questions that we do have a strong enough sense of our industry identity, to say art has a critical place in society, or to ask how much of it would come to the public at all without financial support; or to say (and maybe this is the hardest) that even if we gave everything right now, it wouldn't end social problems, it wouldn't end world starvation, it wouldn't heal all of the sick.

Perhaps once in a long while, we have to stop and read a sonnet, or listen to a canon, or even (and don't let this once take you too far aback) have a good laugh, or a little fun.

I say whatever it takes to get help to everyone who needs it, but not at the expense of our humanity.



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Sunday, October 07, 2007

ACROSS THE NONPROFIT UNIVERSE: FROM POLICY TO PRACTICE

How did I make sense of the nonprofit universe before I discovered the Urban Institute (a Nonpartisian Economic and Public Policy Research Organization)?

There are 11 policy centers under the umbrella of the Urban Institute. The one that rocks my boat is, of course, the Center on Nonprofits and Philanthropy (CNP).

The mission of CNP is to promote understanding of civil society and improve nonprofit sector performance through rigorous research, clear analysis and informed policy.

Even more enticing is one of CNP's programs: the National Center for Charitable Statistics (NCCS) - the national clearinghouse of data on the nonprofit sector in the United States.
Current NCCS Projects include:
  • The "Form 990 Wiki" (a collaborative website) for helping the nonprofit research and practitioner communities reason together about the draft IRS Form 990 released in June 2007 by the IRS. The goal is to develop a set of practical recommendations that have been carefully vetted to minimize their costs and maximize their potential benefit for researchers, regulators and practitioners.
  • Improving the quality of data on nonprofit organizations:
    • The Nonprofit Overhead Cost Study aims to to understand and improve the measurement and reporting of fundraising and administrative expenses.
    • The Quality 990 website focuses on improving the quality of IRS form 990 reporting by nonprofit organizations.


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Friday, October 05, 2007

MISSION WITHOUT I.T. IS LIKE A DAY WITHOUT SUNSHINE

How do you achieve your mission without infrastructure? What is your mission? Help underserved youth get jobs? To get to that mission you'll need to:
  • Tell others about your story? Marketing
  • Ask for help (especially money)? Fundraising
  • Keep your government funding? Accounting
  • Answer an email? IT
Congratulations, now you need $100,000 to carry out your mission (not counting your salary of course).

Will the purpose, the appeal, the grant request and the communication advance your mission? Sure, but it has to make more than $100,000.
Enter the business measurement: Return on Investment or ROI. This is a measure that profit making companies use to determine how much money they make from how much money they used. In other words, if you invest $100,000 and make $500,000, that would be a pretty good return on your investment.

Now, what place does ROI have in the nonprofit sector?
DeShele Dorsey, Senior Director/Philanthropy Division, Changing Our World, in her article "Measuring Return on Investment: The Value of Nonprofit Partners", offers the following:

Measuring the value and benefits of good corporate citizenship is nothing like demonstrating the return on investment (ROI) of a media spot during the National Football League's playoff games

But it's easy to say what it can't do. My point tonight is that if we don't know what return we get on our investment, how are we going to tell our donors that? I see it all the time "Your $1500 helps: feed a child for a year or care for a tree or get a kid to college or buys meals for a senior..." Somewhere along the line we need to be analyzing the numbers, but to do that we have to know what to ask. If you raise $100,000 to put $100,000 into marketing and fundraising in order to raise another $100,000 to give to the kids and then take 15% off the top to manage the money and run the place...what exactly is happening?

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