Call to Action: Oppose Paid Board Members

Dear Nonprofit Members & Devoted Board Members, We're calling on our members to  TAKE ACTION today! ISSUE: The Attorney General's Nonprofit Reform Bills (S-5198A/A-7337) are being finalized over today and over the weekend for introduction and likely passage next week.  They are to go into effect on July 1, 2014. NYCON's POSITION The AG continues to support the harmful practice of having paid, voting board members on nonprofit boards. Paid board members are the single greatest source of conflicts of interests for charities and one that seriously threatens the integrity of and public confidence in our sector.     Excellent board leadership includes board members"giving and getting" resources for mission, not"making and taking" them for private gain. The AG's endorsement of paying board members means that these types of conflicts of interests will continue to occur and plague us.   The inevitable result will be the emergence of more harmful public scandals that tarnish the good work of the over 99% of charities that believe in and practice volunteer board leadership. NYCON believes that the opportunity is right now to stop it at its source! ACTION REQUESTED- CALL TODAY! We urge staff, board leaders, donors, volunteers and all who care about protecting the ethical integrity of our state's charities to call today and Monday at the latest,  the offices of Michael H. Ranzenhofer and   James Brennan  the Bill Sponsors, to voice your support for amending the proposed Bill to prohibit compensated board members. Tell them that true reform means taking solving the problem not adding new, complex regulations trying to manage it. *A revised bill will be submitted early next week, so please, call and make your case. Both offices are well aware of NYCON's position, so even calling and stating your support for NYCON's case against this bill is a step in the right direction! PLEASE CALL TODAY!  Michael Ranzenhofer Albany Office Phone:(518) 455-3161 Regional Office: (716) 631-8695                           (585) 454-0322 James Brennan Albany Office: (518) 455-5377 Regional Office: (718)-940-0641                          (718) 788-7221                          There are other options out there, if we're going to do this, then let's do it right! NYCON fully supports  Senator Marcellino and Assemblywoman Amy Paulin who have both introduced Bills that would end compensated board members! Check out this bill here.              Sincerely,            Doug Sauer, CEO            New York Council of Nonprofits, Inc. (NYCON) Learn More on NYCON's Position   [Watch it Now] Public Hearing: To examine the re-codification of New York State's not-for-profit corporation law in an effort to reduce unnecessary burdens on nonprofits and to enhance nonprofit governance and oversight Changing the Nonprofit Corp Law in NY: Let's Try to Get it Right the First Time...  Understand  the Legislation   A.G. Schneiderman, Senate And Assembly Committee Chairs Propose Groundbreaking Legislation To Reform New York's Charities Laws    Contact Us ! Its up to the nonprofits of New York to educate policy makers, and this is your chance to do so today! Tell these offices you support NYCON's case against compensated board members! Send us Your Feedback! Proud Member of  the National Council of Nonprofits

News from The Non-Profit Times

Audits Show Widespread Underreporting of UBI

By The NonProfit Times - April 29, 2013

Unreported unrelated business income in higher education was found in almost every case examined by the Internal Revenue Service (IRS).

“The audits identified some significant compliance issues at the colleges and universities examined,” said Lois Lerner, director, Exempt Organizations division of the IRS. “Because these issues may well be present elsewhere across the tax-exempt sector, all exempt organizations need to be aware of the importance of accurately reporting unrelated business income and providing appropriate executive compensation.”

This is part of the multi-year project on tax-exempt colleges and universities. The Colleges and Universities Compliance Project was launched in 2008 with the distribution of detailed questionnaires to 400 randomly-selected colleges and universities. The IRS selected 34 of the 400 for examination because their questionnaire responses and Form 990 reporting indicated potential noncompliance in the areas of unrelated business income and executive compensation.

Unrelated business income (UBI) is the income from a trade or business regularly conducted by an exempt organization and not substantially related to its exempt purpose. Unrelated business taxable income is the UBI that is taxable after deducting expenses directly connected to the trade or business. Because UBTI is calculated by totaling the UBI from all activities and subtracting the total allowable deductions, losses from one activity can offset profits from another. Examinations have resulted in:

• Increases to UBTI for 90 percent of colleges and universities examined totaling about $90 million;
• More than 180 changes to the amounts of UBTI reported by colleges and universities on Form 990-T; and
• Disallowance of more than $170 million in losses and Net Operating Losses (NOLs, i.e., losses reported in one year that are used to offset profits in other years), which could amount to more than $60 million in assessed taxes.

The primary reasons for increases to UBTI in the completed exams were:

• Disallowing expenses that were not connected to unrelated business activities.

The IRS found that examined colleges and universities were reporting certain losses as connected to unrelated business activities when they were not. The misreporting occurred in two ways:

1. Lack of profit motive: The IRS found that organizations were claiming losses from activities that did not qualify as a trade or business. Nearly 70 percent of examined colleges and universities reported losses from activities for which expenses had consistently exceeded UBI for many years. UBI must be generated by a trade or business.

An activity qualifies as a trade or business only if, among other things, the taxpayer engaged in the activity with the intent to make a profit. A pattern of recurring losses indicates a lack of profit motive. The IRS disallowed reporting of activities for which the taxpayer failed to show a profit motive. Those losses no longer offset profits from other activities in the current year or in future years, with more than $150 million of NOLs disallowed.

2.  Improper expense allocation: The IRS also found that on nearly 60 percent of the Form 990-Ts examined, colleges and universities had misallocated expenses to offset UBI for specific activities. Organizations may allocate expenses that are used to carry on both exempt and unrelated business activities, but they must do so on a reasonable basis and the expenses offsetting UBI must be directly connected to the UBI activities. In many cases, the IRS found that claimed expenses, which generated losses, were not connected to the unrelated business activity.

The IRS checked the calculations for all NOLs reported on returns under exam and found that NOLs were either improperly calculated or unsubstantiated on more than a third of returns. As a result, the IRS disallowed nearly $19 million in NOLs.

The IRS also determined that nearly 40 percent of colleges and universities examined had misclassified certain activities as exempt or otherwise not reportable on Form 990-T. Fewer than 20 percent of these activities generated a loss. The examinations resulted in the reclassification of nearly $4 million in income as unrelated, subjecting those activities to tax.

Examinations resulted in more than 180 changes to UBTI reported for specific activities by colleges and universities. More than 30 different activities were connected to the changes. The majority of these adjustments came from the following activities: Fitness, recreation centers and sports camps; advertising; facility rentals; arenas; and, golf.

To see the online aricle click here.

Comptroller Thomas P. DiNapoli's Weekly News

DiNapoli Audit Finds $7.7 Million in Questionable Charges by Special Education Providers

The Lake Grove School and the Mountain Lake Children’s Residence, two special education providers run by the same company, overcharged taxpayers by as much as $7.7 million over a four–year period, according to an audit released Friday by New York State Comptroller Thomas P. DiNapoli.

DiNapoli: State’s Brownfield Cleanup Program Needs To Reach More Sites; Be More Cost–Effective

The New York State Legislature should examine options to restructure the state’s primary program to revitalize contaminated properties – the Brownfield Cleanup Program – in order to fully achieve the important economic, public health and environmental goals set when the program was created, according to a report released Monday by State Comptroller Thomas P. DiNapoli.

DiNapoli Supports Lobbying Disclosure and Independent Director Proposals at Peabody Energy

New York State Comptroller Thomas P. DiNapoli Tuesday announced support for two shareholder proposals at Peabody Energy Corporation’s annual meeting on April 29 calling for Peabody to disclose corporate lobbying expenses and to require the chairman of the board to be an independent director.

DiNapoli Refers Investigation of Substance Abuse Provider to U.S. Attorney

Phoenix Houses of New York, Inc. provided inappropriate perks to its executives exceeding $223,000 while under contract with the Office of Alcoholism and Substance Abuse Services, according to a report released Wednesday by State Comptroller Thomas P. DiNapoli. DiNapoli referred the findings to U.S. Attorney Preet Bharara’s office for review.

Comptroller DiNapoli Releases Municipal Audits

New York State Comptroller Thomas P. DiNapoli Wednesday announced his office completed the following audits: the Bloomingburg Joint Fire District; the Village of Depew; the Essex County Probation Department; theEssex County Sheriff’s Department; the Town of Johnsburg; the Town of North Castle; the Town of Owego Fire District; the Rescue Fire Company, Inc.; and, the Village of Village of the Branch.

Comptroller DiNapoli Releases Audits

New York State Comptroller Thomas P. DiNapoli Wednesday announced his office completed audits of the the Beacon City School District; the Chenango Valley Central School District; the Fairport Central School District; the Monroe–Woodbury Central School District; and, the Oppenheim–Ephratah Central School District.

The Greatest Risk of All from the Non-Profit Risk Management Center

Got Risk Insight? Submit a Session Proposal Today

If you’ve figured out how to identify risks, teach safety and risk management to the board, or engage staff members in risk management initiatives… we want you on the faculty of the 2013 Risk SUMMIT. Visit the conference webpage and complete the workshop proposal form before the May 1 deadline.

The Greatest Risk of All

By Melanie Lockwood Herman

“I’m only human
Of flesh and blood I’m made
Human
Born to make mistakes”

– Human, The Human League, © Universal Music Publishing Group, Kobalt Music Publishing Ltd., EMI Music Publishing.

Many leaders of leading nonprofits worry excessively about external threats: competing organizations, fickle institutional funders, increased government regulations, the unpredictable global economy, radical political changes, and the like. Yet the most serious threats to a nonprofit mission arise from the humanity of our workforce. After all, we’re only human. Avoiding conflict, burying mistakes and feeling apprehensive about risk-taking are familiar components of human DNA.

What’s the Risk of Being Human?

·         Conflict: When we ignore conflicting opinions or work styles at the board table or in the staff work room, we may rob our nonprofits of the contributions of creative leaders.

·         Mistakes: When we severely punish employees for their errors, we may inadvertently cause staff to bury their mistakes.

·         Risk Aversion: When we allow fear to extinguish proposed action that is risky, but potentially mission-advancing, we fail to leverage our reputation and assets.

Don’t Eliminate the Greatest Risk

If the greatest risk facing your nonprofit is its human DNA, how can you manage human nature? Here are a few strategies to consider:

·         Embrace Conflict: Identify examples of unresolved conflict in your nonprofit and reflect on the consequences. What toll has conflict avoidance taken on your mission? Have high-performing staff or volunteer leaders walked away in frustration? Acknowledge that conflict is normal. Instead of pretending that everyone agrees, dig deep to find the wisdom in disagreement. Applaud the team member who has the courage to say “I disagree, and here’s why,” when everyone else has voted “yes.”

·         Bring Mistakes to the Surface: Unearth mistakes and face them head on. Provide a comfortable space in which to step up and fess up to a mistake. Is that comfortable space consistent in the divisions, departments or functions of your nonprofit? How might you reward staff who bring errors, oversights or even wrongful assumptions to light?

·         Resolve to Take More Risk: How often is a creative idea dismissed as “too risky?” Instead of allowing gut reactions or protests from your risk manager to stifle creative ideas, reflect on ways to encourage and inspire risk-taking.

The Center offers numerous resources on the topic of human-inspired risk, including the upcoming webinar on HR Risk: Take the High Road without Getting Lost. Join me live on May 1st at 2 pm Eastern, or register to watch the recording at your convenience. You can also check out some of our articles exploring HR risk and reward:

·         Creating an Effective Employee Handbook for Your Nonprofit

·         Five Things That Should Never Appear in an Employee Handbook

·         Grievance Procedures and Internal Dispute Resolution

·         Happy Endings

·         Human Resource Risks and the Forest of Fog

Melanie Lockwood Herman is Executive Director of the Nonprofit Risk Management Center. She welcomes your comments about people and risk or your questions about the Center’s services at Melanie@nonprofitrisk.orgor (202) 785-3891. The Center provides risk management Cloud tools and resources at www.nonprofitrisk.org and offers custom consulting assistance to organizations unwilling to leave their missions to chance.

Nonprofit CEOs face pay limits in July

New $199G cap targets health, human services

After learning that two top executives at a New York City nonprofit that serves the developmentally disabled earned nearly $1 million each and got other benefits, Gov. Andrew Cuomo 15 months ago issued an executive order limiting executive salaries of organizations that contract with one or more of 13 state agencies to $199,000 a year.

The order, which also restricts administrative spending, directed the departments to issue regulations within three months. Proposed regulations came out after 90 days had elapsed and were to have taken effect Jan. 1 of this year. Due to the issue’s complexity and questions and criticism from the nonprofit sector, they were revised and the implementation date was moved to April 1. Additional changes were published in March, and the start date is now scheduled for July 1, nearly 18 months after Cuomo’s executive order.

To Read The Full Article Click Here

NYSACRA Action Alert

NYSACRA Action Alert

PLEASE consider reaching out to your assemblyman and senator to express your concern over the cuts proposed below. Springbrook provides invaluable support to people with developmental disabilities. The proposed 6% cut equates to $1.2 million for this organization.The proposed 6% cut equates to $1.2 million for this organization. The phone calls take less than a minute each. PLEASE PLEASE call.

As you are well aware, the proposed 2013-14 Executive Budget proposes a 6% across the board cut to all voluntary not-for-profit providers throughout the State of New York, effective April 1, 2013.  If this cut is enacted, the developmental disabilities system of supports and services will be negatively impacted, dramatically.  NYSACRA has received information from members as to how the reductions will be absorbed if a restoration is not successful.  Agencies will be forced to: reduce services and supports, eliminate entire programs, layoff all levels of staff including direct support professionals.  We all know how this will translate if the cuts are to be taken: the great strides we've made as a sector will quickly erode and the quality of life for people with intellectual and developmental disabilities (I/DD) will be negatively impacted.

Both houses of the State Legislature are in the process of negotiating and getting ready to release the respective one-house budget measures.  While we understand the 6% across the board cut to the not-for-profit developmental disabilities sector is gaining great attention in the State Legislature, we need to continue advocacy efforts and therefore we are asking agencies, parents and family members, agency staff and direct support professionals, self advocates to make two telephone calls this week.

WHO TO CALL:

Please make two telephone calls, one to your State Assemblymember and the other to your State Senator in their Albany Offices

WHEN:

This week (the week of March 4^th)

WHAT'S MY MESSAGE:

"I'm a constituent and I am concerned the proposed 6% across the board cut to the not-for-profit developmental disabilities providers will negatively impact supports, services and programs.  I wish to thank my Assemblymember/Senator for his/her support of people with intellectual and developmental disabilities and ask him/her to support restoration of the 6% proposed cut in the one-house budget bill."

HOW:

Contact the Assembly Operator at 518-455-4100 and ask to be transferred to your Assemblymember's Office. (if you do not know who your Member of the Assembly is, go towww.assembly.state.ny.us to identify your Member.  You may also obtain his/her direct Albany Office telephone number, rather than going through the Assembly Operator).

Contact the Senate Operator at 518-455-2800 and ask to be transferred to your Senator's Office (if you do not know who your Member of the Senate is, go to www.nysenate.gov to identify your Senator. You may also obtain his/her Albany Office telephone number on the website, rather than going through the Senate Operator).

THANK YOU FOR YOUR ONGOING ADVOCACY AND EFFORTS!

LOOK FOR MORE NYSACRA ACTION ALERTS

THROUGHOUT THIS WEEK AND NEXT WEEK

Sequestration and Nonprofits in New York State

Sequestration and Nonprofits in New York State: Telling the Story of Impact on the People We Serve

When Washington policymakers failed to reach agreement to stop the $85 billion in arbitrary budget cuts known as “sequestration,” they let loose a wide array of cuts and changes that are likely to be felt first and frequently by charitable nonprofits. We feel that the best way to demonstrate the adverse effect of sequestration on our communities is for charitable nonprofits like yours to share the stories and data of what it means to the people you serve. That is why the websitewww.GiveVoice.org has been launched by the National Council of Nonprofits.

As a member of the New York Council of Nonprofits, you are part of the nation’s largest network of charitable nonprofits, connected through the National Council of Nonprofits. This network is mobilizing to (a) alert the nonprofit community about how the new federal sequestration cuts will affect almost every charitable nonprofit in America – even those without any government contracts – and (b) start documenting the effects of the sequestration cuts on the work of nonprofits and the communities we all serve.

The cuts mean that nonprofit staff members and board members must raise billions of dollars more this year alone to handle the resulting increased demands for services.  We encourage you to visit www.GiveVoice.org to see how sequestration will have multiple ripple effects and then share your data and stories about what the cuts mean to the work of your nonprofit (including changes to your own staffing levels) at www.GiveVoice.org so state, subsector, and national trends can be analyzed the story of the impact can be documented and demonstrated.

Historically, the nonprofit community has suffered because we have been fragmented and separated into different silos. This new GiveVoice.org resource allows nonprofits here in New York to learn together and lift our voices together for the public good.

Thanks for your membership in New York Council of Nonprofits; by coming together, the nonprofit community can better serve our broader communities across New York.

National Webinar Free for Your Members

Sample Promotional Language

Like yours, many nonprofit organizations often find themselves wondering...

• Do we need to have an independent audit? (And what does that entail anyway?)
• Are there special rules for us because we receive government grants?
• How can we prepare so that the process goes smoothly?
• What’s the board’s role?

To answer these questions and more, NYCON is excited to bring you Nonprofit Audits in a Nutshell, a free webinar on March 28th at [3:30pm Eastern] , hosted by our national network, the National Council of Nonprofits. This webinar features practical tips from nonprofits about their audit practices, as well as experts from BoardSource andRaffa and is designed to give you background on everything you need to know about the independent audit process (from legal requirements to practical advice).

Thanks to the support of First Nonprofit Foundation, this exclusive webinar is available, free of charge, to all members of NYCON. Don't miss this opportunity - Register Today!

Show A Little Love to Your Corporate Documents

This Valentine's Day it's Time to Give Your Corporate Documents the Love and Affection they Deserve! It's the beginning of a new year and a very good time to show a little love...to your nonprofit's Corporate Documents!  Bylaws, Personnel Policies and other Corporate Documents need regular attention to ensure they are appropriate, consistent with the Nonprofit Incorporate Law in New York State and provide sufficient protection for your organization and employees. With packages for NYCON Members we can help ensure your peace of mind at a price your nonprofit can afford.

Bylaws & Personnel Policy Review [Get Started]  Whether you are a newly created organization or a long standing one, risk management is the keystone for good governance of your organization.  Two important tools for protection of your organization from mission killing liability and litigation is the creation and annual review of corporate bylaws and personnel policies.  Our attorneys and legal staff will dissect your corporate documents and review same for legal pitfalls, returning same to you with revision comments and "best practice" advice within 30 days. A Bylaw Review is $500. A Personnel Policy Review is $700. Package price for both is only $1,000.  Want to Learn More? Click here and let us know and we´ll have one of our legal staff get back to you to start the process!

Corporate Document Review [Get Started]  Another important element of risk management is the maintenance of the proper form of corporate existence.  Our attorneys and legal staff will analyze your Certificate of Incorporation, and any Amendments for consistency between them and your internal corporate documents and Bylaws, returning the same to you with revision comments and "best practice" advice within 15 days.A Corporate Document Review is $300.  Want to Learn More? Click here and let us know and we´ll have one of our legal staff get back to you to start the process! To see the article online Click Here

Affiliation Solutions Provided by NYCON

Affiliation Solutions Provided by NYCON

We Educate Guide and Support
NYCON knows nonprofits and we know the anxieties, risks and
opportunities that come with the consideration of affiliating
with another organization.  NYCON educates by providing training sessions on affiliation in communities across the state for
nonprofits and funders, and providing our members with informational resources and tools through our website or upon request.  NYCON professionals are available to advice and consult
our members throughout the process, from the very earliest
stage of thought and inquiry, to actively engaging a partner.
We have successfully completed over 100 affiliations in the past
10 years, our staff have experienced the nuances of affiliation as
well as the social, political, and regulatory hurdles occasionally
placed before it and have provided time-and-time again a comprehensive, tailored solution to achieve success.
Our Service Package
NYCON offers a unique, comprehensive and coordinated package of professional services delivered in a proven multi-phased
approach to affiliation that is designed to support decisionmaking, due diligence, and successful implementation and affiliation success in the future.
Expert Services Provided Include
•  Assistance in exploring partners & options
•  Facilitation, documentation and logistical management of
the negotiating process
•  Financial analysis & budgeting
•  Direct accounting, board and program  assistance if there
are “fix-it” items important to the process and it’s success

Please contact Doug Sauer, CEO
Ph: (800) 515--5012 ext. 103  --5012 ext. 103  
Email: dsauer@nycon.org
•  Program assessment & planning
•  Human resource planning & patterning, including comparative personnel policies & compensation/benefits
analysis
•  Cost savings analysis for the short and long-term
•  Strategic advice regarding messaging, communications
and funder engagement also for the short and long-term
•  Legal support services:
⇒ Corporate document review & amendments, as necessary for success (Certificates of Incorporation, Charters, Bylaws, etc.)
⇒ Analysis & advice as to legal options
⇒ Preparation of board and/or membership resolutions
⇒ Analysis of contracts, state and national affiliation
arrangements, and regulatory or licensing requirements that may impact on affiliating
⇒ Facilitation with regulatory agencies and their Counsel’s office
⇒ Legal representation (via the Endorsed Corporate law
firm of Watson & West, PLLC) including issuance of
legal opinions, preparation of dissolution & merger
documents, purchases and sales, etc.
Sometimes it is necessary or determined to be best that an
organization dissolve or simply go out of business.  Sometimes a formal merger is what is best.  Our staff are conversant in all of the forms of affiliation and look forward to providing you with assistance.

Click Here to see the flyer.

Biggest Mistakes Boards Make, Founding Fathers Write a Grant Proposal and more

Practical, Provocative and Fun Food-For-Thought for Non-Profits

The Trouble with "Passion for the Mission" . . . editor notes issue #84

"Passion for the mission is a must" . . . so say many job announcements and board member requirement lists. Wait a minute. Let's examine this sacred cow cliche a little more. Read More>

Surprisingly Uncomplicated Path for Developing Leaders

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

In the Swirling Dust of Change, Life Still Goes On for an ED

It just makes sense that the founder of the Center for Digital Storytelling would tell his own story in a remarkably compelling way. Here's Joe Lambert with a thoughtful First Person Nonprofit account of how organizational problems can bring out the creativity and best in people and how, through it all, life goes on, though it's your choice how to embrace its everchanging moods: Read More>

The Founding Fathers Write a Grant Proposal

"Just look at this second sentence!" groaned Samuel Adams. "'We hold these truths to be self-evident  .  .' This flies in the face of 'evidence-based practice'! We'llnever get funded!" Read More>

Ten Biggest Mistakes Boards and Executives Make

"To err is human," and as we all ruefully know, nonprofit board members and executive directors are typically human. Here are some of the biggest mistakes we make: Read More>

Take a 3-Minute Vacation to an Oscar-Nominated Film Starring Avocados

Has anyone else seen an avocado in an Oscar nominated film this year? Read More>

To see it online Click Here

Nonprofit Knowledge Matters | Fundraising Flu

Diagnosis: Serious Illness.

Rx: Manage Expectations and Change the Culture

A new report on fundraising has uncovered a serious issue regarding the health of charitable nonprofits. Like the flu, it’s contagious, spread by mismatched expectations. But, unlike the flu, no immunization shot is available. Instead, staff leaders and board members who are anxious to avoid this debilitating condition can take some basic precautionary measures to recognize the symptoms and commit to re-thinking the organization’s culture.

 

Like influenza, the diagnosis and consequences can be quite serious: Let’s call it, “the Fundraising Flu.” When it hits, nonprofits are so weakened and fatigued that they lack the basic elements necessary to successfully raise money. We’ve all seen it happen. It starts with the germ of mismatched expectations, which leads to disappointment and frustration that weaken relationships and prevent a positive culture surrounding fundraising at the nonprofit.

 

Symptoms of the Fundraising Flu include:

• Board members who expect executive directors to raise all the money.
• Executive directors often don’t have a background in fundraising and view it as geting in their way of doing the “real work” of the organization, and therefore expect their boards and development directors to raise all the money.
• Development directors who feel unsupported by executive directors and boards who are not engaged with fundraising activities.

Fortunately, we can now view the recent insightful report by CompassPoint, Underdeveloped: A National Study of Challenges Facing Nonprofit Fundraising, as a physician's desk reference on the health of nonprofits. The report's prognosis is that charitable nonprofits large and small can suffer from this affliction. While examining the reasons why there is such high turnover and so many vacancies in the development director position throughout the charitable nonprofit community, the report recognizes that it’s more than just the germ of mismatched expectations that leads to Fundraising Flu. It’s also the absence of technology or strategic thinking. Indeed, almost a third of smaller nonprofits who responded to the survey – those with budgets of less than $1 million – reported that they did not have sufficient tools in place, such as either a database to track donor information – or a fundraising plan. In their weakened conditions, without technology or key staff, fundraising, delivery of mission, and eventually sustainability, all suffer.

 

How can we all keep the Fundraising Flu at bay?

The Rx: Recalibrate expectations and change the culture. The report explores the causes of high vacancies that exist for the position of development director: survey data show that a significant number of development directors are being asked to leave because they are not raising enough money or are judged as not well suited for the job. These findings point to mismatched expectations that we see over and over again. Do these scenarios sound familiar to you? Executive directors wish that board members would be more active in raising money; the board expects the executive director to pull millions out of a hat. Meanwhile, the development director is pulling out his/her hair trying to get the executive director to pick up the phone to call a donor, while the board is skeptical whether the development director’s high salary is a worthwhile investment. Obviously there is a disastrous mismatch of expectations going on (everyone thinking that it is everyone else’s fault that the nonprofit is not bringing in more contributions). It’s unfair to expect a development director to succeed at fundraising without the support of the board or executive director (21% of the development directors surveyed characterized their relationship with the executive director as “weak or nonexistent,” and three out of four executive directors characterized their board’s engagement as “insufficient”). It’s also unfair to hire someone who is not experienced or skilled at fundraising and expect money to flow in the door (one in four executive directors reported that their development directors were “novices” in various basic fundraising activities). Executive directors who don’t like to pick up the phone to speak with a donor should not expect their board members or development directors to pick up their slack. And board members who think the reason why the development director was hired is to pick up their slack should step off the board! What jumps out from the report is that development directors are not sticking around when they don’t have the resources to succeed, and those resources includeengaged leadership. The report points out that fundamentally, in order to avoid Fundraising Flu, charitable nonprofits need inspired and engaged leadership around financial sustainability.

 

The report’s experienced authors note that we need a “’fundamental shift in thinking and action across the nonprofit sector” in order to embrace a culture that supports fundraising and is more donor centered. We think that what’s also needed is a dose of better managed expectations. With fundraising, the devil is in the details: not the details of a grant proposal, but the details that keep a nonprofit on track with follow-up, thank you notes, deadlines, and putting all those business cards that are stacked up on your desk into a database. These administrative details are not necessarily most efficiently accomplished by a high level development director. Before hiring a development director, consider whether a development assistant is more appropriate. As played out in this Blue Avocado article, the lack of a development director may not be fatal if what really is needed is a detail-oriented staff member who can keep the fundraising activities on track. But success will only be achieved when there is an overall strategy in place that supports fund development, championed by an executive director and board both willing to provide leadership for the organization’s fund development activities.

 

At its essence the report’s cry for charitable nonprofits to embrace a “culture of philanthropy” (we prefer “culture of sustainability”) is the recognition that charitable nonprofits can’t be successful in fundraising –even if they are fortunate enough to hire a dynamite development director – unless there is fundraising leadership in place (a triad of engagement between the executive director/development director/board of directors) as well as a supportive culture for fundraising. To read more about how to combat the Fundraising Flu, we refer you to CompassPoint's full report, especially the Call to Action that identifies 10 steps for charitable nonprofits to take to immunize themselves from what the authors characterize as the “passive, apologetic, and siloed” nature of fundraising today.

And, for training and peer learning about leadership and fund development, don’t forget to check the calendar of events of your state association of nonprofits. Engagement in fund development is too important not to make it one of the highest priorities for the leadership of your organization.