Nonprofit Hot Topics
This page provides extensive information about important issues affecting the San Mateo County nonprofit community.
Accountability & Governance
in the Nonprofit Sector
Overview
Nonprofit organizations are regulated by the Nonprofit Corporation Laws within the
State Corporations Code, and Revenue & Tax Codes under the Internal Revenue Service (IRS).
Accountability and governance are important factors for enhancing the public's trust in a
nonprofit organization's ability to appropriately fulfill their responsibilities as nonprofit
corporations that operate for the benefit of the general public. Following are some resources
to assist nonprofit organizations and the larger community about steps being taken to address
issues of accountability and governance in the nonprofit sector.
Resources
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Emergency Planning & Response - Nonprofit &
Community Efforts
Overview
In November 2005, Thrive formed an Emergency Services Task Force to look at emergency planning and response efforts within the nonprofit sector and local community in San Mateo County. Click here for more information and a list of resources identified by the Task Force.
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Nonprofit Funding, Overhead Costs, & Reporting
Overview
Special thanks to the California Association of Nonprofits for their hard work in pulling together this information as part of their November-December 2005 CAN Alert, entitled, "Scrimping on Overhead: Penny Wise, Pound Foolish" by Kennard T. Wing, CMA. The alert highlights the findings from the Nonprofit Overhead Cost Study, including:
- Overhead, far from a "necessary evil," is the basis for mission effectiveness
- Far from making them good stewards of the contributions they receive, the excessively low overhead at many nonprofits, especially smaller ones and those receiving significant public sector funding, is hampering their overall effectiveness.
- Nonprofit boards and management have a responsibility to see that their organizations have financial staffing that is adequate as to both amount and professional qualifications. The quality of financial controls and reporting at the nonprofits in the study was a direct reflection of the amount and qualifications of staff devoted to the work.
- Recommendations point to the need for adequate financial controls and reporting in nonprofits, particularly with regards to functional expense allocation.
More information about the study, as well as free resources related to the study's recommendations are available online at http://www.coststudy.org.
CAN's Nonprofit Quality Reporting Initiative
CAN's Nonprofit Quality Reporting (QR) Initiative has a vision that complements the Nonprofit Overhead Cost Project: to improve the quality of financial data coming from the nonprofit sector on Forms 990, funder reports, audits, and other reporting tools. CAN thinks better data will help restore the public trust in nonprofits and align funding decisions with effective programming at the community, state, and federal levels. CAN has developed the following tools to help nonprofits improve their data - and save time and money on accounting and reporting:
- United Chart of Accounts (UCOA) - Download at http://www.CAnonprofits.org.
- Nonprofit Finance Conferences and Nonprofit Accounting Boot Camps
- CAN Financial Servivces and Sample Financial Policies - For more information, call Allan Strand at (213) 347-2070 x206.
Pesky Ratios Often Used by Donors & Funders
Total Expense = Program + Management + General + Fundraising Expenses
Program Ratio = Program expense ÷ Total expense
Fundraising Efficiency Ratio = Fundraising expense divided by Total contributions
Cost to Raise a Dollar = (Contributions + Fundraising Events) ÷ Fundraising Expenses
Additional Reading
- "Guidelines for the Funding of Nonprofit Organizations" by Paul Brest, President and CEO Of the William & Flora Hewlett Foundation, along with a working group of foundations and nonprofit organizations in the fall of 2003. This article makes the case for operating support. To read the guidelines as adopted by Independent Sector's Board of Directors, see http://www.independentsector.org/issues/buildingvalue/opsupport.html
- "Don't Spread It Thin" by Kennard T. Wing, discusses the reduced impact resulting from failing to fund adequate organizational infrastructure. This Foundation News and Commentary article won the 2003 Silver Award from the Society of National Association Publications. Read it at http://www.foundationnews.org/CME/article.cfm?ID=2267
- "The Core of the Mater," a report released by the National Committee for Responsive Philanthropy on a convening of more than 50 nonprofit leaders that took place in June 2003. Download a PDF version at http://www.ncrp.org/PDF/Report_The%Core%20of%20the%20Matter.pdf
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Nonprofit Leadership, Executive Transitions, & Succession Planning
Overview
How do we prepare our nonprofits for changes in leadership? How are we preparing new generations of nonprofit leaders? What kind of support is available to emerging and current leaders of nonprofits? The following resources are meant to support nonprofit organizations that may be preparing for changes in leadership and nonprofit leaders looking for support in stepping up to the leadership challenge.
Research on Nonprofit Leadership, Executive Transitions, & Succession Planning
http://www.nonprofitquarterly.org/section/804.html
In "Bravo Careers to Cure Social Sector’s Leadership Chasm," Phil Anthrop
http://www.bridgespangroup.org/kno_articles_leadershipdeficit.html
“The Nonprofit Sector’s Leadership Deficit” (2006) describes research by The Bridgespan Group, and begins to lay out some ideas for discussion and action related to nonprofit leadership development.
http://www.geofunders.org/index.cfm?fuseaction=Page.viewPage&pageId=389
Grantmakers for Effective Organizations (GEO) has released two reports related to nonprofit leadership development. According to GEO, leadership development practices are increasingly recognized by foundations as a key driver of nonprofit effectiveness. Besides improving nonprofits themselves, funding for leadership efforts helps foundations understand better the daily challenges faced by nonprofits and ways to improve their own practices in response.
http://www.compasspoint.org/
CompassPoint offers research, consulting, and workshops related to nonprofit leadership and executive transitions, including:
- "Daring to Lead 2006" - national study on Executive Directors
- Executive Search & Transitions Services
- Board Café: "Succession Planning for Nonprofits of All Sizes" by Jan Masaoka & Tim Wolfred
- Sample Emergency Succssion Plan (pdf)
- "Stepping Up: A Board's Challenge in Leadership Transition," Tim Wolfred, Nonprofit Quarterly, Summer 2005.
http://www.sandiego.edu/academics/soles/acadprog/nonprofit/center.php
A University of San Diego study of nonprofit executive leadership, including comparison with national trends in 2006.
http://caseyfoundation.com/initiatives/leadership/reading.htm
Annie E. Casey offers a variety of programs and publications on leadership development and executive transitions, particularly, "Up Next: Generation Change and the Leadership of Nonprofit Organizations" (PDF) and "Founder Transitions: Creating Good Endings and New Beginnings" (PDF).
http://www.guidestar.org/news/features/leadership.jsp
A 2004 survey of Executive Directors found that 23% of them anticipate leaving their organizations within two years. Is the Nonprofit Sector ready? Read More:
Nonprofit Leadership & Professional Development Opportunities in San Mateo County
http://www.eparks.net/smc/department/eps/home/0,2151,1819_292414,00.html
County of San Mateo's Training and Development Class Offerings
http://www.ptctraining.net/about.htm
Peninsula Training Collaborative - SMCCD/HSA partnership with local nonprofits focused on child welfare and foster care
http://www.pcf.org/nonprofit_center/
Peninsula Nonprofit Center/Peninsula Community Foundation hosts trainings/workshops offered by the following organizations:
- Foundation Center - http://www.fdncenter.org
- CompassPoint Nonprofit Services - http://www.compasspoint.org
- Center for Excellence in Nonprofits (CEN) - http://www.cen.org
- Nonprofit Finance Fund - http://www.nonprofitfinancefund.org
College/University Trainings & Research Programs Relevant to the Nonprofit Sector
http://canadacollege.net/academics/degrees/human_services.html
Human Services Program - Cañada College / Business & Workforce Development Division
Offers a variety of Certificate and Associate Degree programs, including Promotor Education & Employment Program (PEEP)
http://www.ndnu.edu/future/graduate/academics/bus_mpa.html
Notre Dame de Namur - Master of Public Administration
http://www.gsb.stanford.edu/csi/Community/index.html#Harness
Stanford Business School:
- Executive Program for Nonprofit Leaders (2 weeks)
- Center for Social Innovation (CSI)
- Public Management Program for MBAs
- Board Fellows
- Pro Bono Management Consulting
- CSI/Stanford Project on Emerging Nonprofits (SPEN) report on "Managing Through Challenges"
http://iesweb.sjsu.edu/searchprofdev/programDetail.jsp?programId=2768
SJ State Nonprofit Certificate Program, co-sponsored by CompassPoint Nonprofit Services, in cooperation with the Community Foundation of Santa Cruz County
http://www.usfca.edu/inom/
USF Institute for Nonprofit Organizational Management (INOM):
- Master of Nonprofit Administration
- Bachelor of Public Administration with an Emphasis on Nonprofit Administration
- Research, including regional reports on Silicon Valley, San Francisco, and San Diego
- Nonprofit Management Teaching Resource Center
Other Resources
http://www.edsurvivalguide.org
Written by Bay Area nonprofit consultants Mim Carlson and Margaret Donohoe, the Executive Director’s Survival Guide provides ideas, stories, wisdoms and warnings to help Executive Directors navigate the complex position they are in, and find practical ways to deal with some of the obstacles they are most likely to face along the way.
http://www.pfdf.org/about/index.html
Leader to Leader Institute - formerly, the Peter F. Drucker Foundation for Nonprofit Management.
http://www.transitionguides.com
Based in Maryland, TransitionGuides is a collaboration of consultants with extensive track records in working with nonprofit organizations and leadership transitions. TransitionLeader is a free e-newsletter for those interested in helping to strengthen nonprofit organizations during leadership change.
http://www.bkconnection.com
Creating Leaderful Organizations: How to Bring Out Leadership in Everyone, Joseph A. Raelin. Berrett-Koehler, 2006.
http://www.boardsource.org
- "Finding and Retaining Your Next Chief Executive: Making the Transition Work," Thomas N. Gilmore. Governance SEries Booklet, BoardSource, 1993.
- "Hiring the Chief Executive: A Practical Guide to the Search & Selection Process," Sheila Albert, BoardSource, 2000.
http://www.cfar.com
Making a Leadership Change: How Organizations & Leaders Can Handle Leadership Transitions Successfully, Thomas N. Gilmore. Center for Applied Research, 2003.
http://www.perseuspublishing.com
Managing Transitions: Making the Most of Change, William Bridges, Perseus Publishing, 1991.
Phone: 614-228-7444
"Following the Leader: A Guide for Planning Founding Director Transition," Emily Redington and Donn Vickers. The Academy for Leadership & Governance, 2001.
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Government
Funding & Budget Processes
State Budget Update: On January 10, Governor Schwarzennegar released his proposed 2006-2007 budget of $125.6 billion. Details are available online at http://www.ebudget.ca.gov/. As summarized in the San Francisco Chronicle, the budget assumes a surge in personal income tax revenue and increases spending on education, transportation and prisons, while cutting funding for a variety of health and human service programs. In the January issue of his "News for Nonprofits," Senator Joe Simitian offered his thoughts and perspective on how the budget proposal may impact the local nonprofit sector. For details and in-depth analysis of the state budget, you may also want to review these websites: California Department of Finance, Legislative Analyst Office; Child Care Law Center; California Budget Project, Western Center on Law and Poverty; Health Access California; California Food Policy Advocates.
Federal Budget Update: On February 6, President Bush released his budget proposal for fiscal year 2007. As summarized in the Washington Post, "the $2.77 trillion budget emphasizes spending on the country's fight against terrorism while deeply cutting domestic programs to deal with a budget deficit projected to reach an all-time high this year." Details are available online at http://www.whitehouse.gov/omb/budget/fy2007/. For more information and analysis, you may want to review the following websites: OMB Watch; Center on Budget & Policy Priorities; Nonprofit Research Fund / Aspen Institute
Why the economy, government funding, and budget processes are important
Changes in the economy and government funding/budget processes play a critical
role in shaping the resources available to support nonprofits in serving the community.
The following resources are meant to help nonprofit organizations and the larger community
learn more about how these processes impact them and appropriate responses for them to consider.
Resources
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The November 2005 issue of Nonprofit Quarterly featured an article by Rick Cohen entitled "Slippery Slope Leads to Rocky Road for Nonprofits." It is about HR1461, the affordable housing bill that passed in October 2005, and included placed restrictions on voter registration and get-out-the activities by nonprofits interested in applying to a new affordable housing fund. These restrictions do not apply to for-profit organizations that apply to the fund. The passage of HR1461 reminds us of the importance of nonprofit rights like free speech, advocacy, and free association, and it highlights the important role of nonprofit membership organizations like Thrive in helping our nonprofits to understand and exercise these rights. As noted by Cohen, "[W]hen it comes to preserving fundamental nonprofit advocacy rights, we truly are all in it together….Everyone has to see their stake in the game and not leave the fights only to the small slice of nonprofits that may be the primary constituency of this or that federal program." Read the entire article: http://www.nonprofitquarterly.org/section/763.html
Note: HR1461 passed 331-to-90 in the House, and the nonprofit gag provision is currently not included in S190, the Senate version of the bill. California Representatives voted along party lines, with Democrats voting against and Republicans voting for the bill.
- "Why should nonprofits make it their business to understand and affect tax policy?"
An opinion by fundraising guru, Kim Klein. Taxes support vital services that are
central to the health of our communities and the work we do, so why are nonprofits
so passive when it comes to taxes? In this article published in the Nonprofit Quarterly,
fundraising guru Kim Klein notes that since private funding cannot replace government
funding, much more clear and constant education is needed about the role of taxes,
the way taxes are levied, and the type of taxes we pay. Read
the article: http://www.nonprofitquarterly.org/section/554.html
- March 2005 Nonprofit Quarterly Articles on the federal government and tax cuts:
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Partnerships & Collaboration
Overview
Partnerships and collaboration within the nonprofit community, as well as with the business, government, and foundation
communities, are vital to the health of our San Mateo County community. The following resources are meant to help
nonprofit organizations and the larger community understand the challenges and opportunities presented by these
partnerships.
Resources
- "The Reality Underneath the Buzz of Partnerships" - Author Francie Ostrower looks at why foundations
support partnerships and why nonprofits engage in those partnerships, as well as the benefits and
limitations of such partnerships. Featured in the Spring 2005 issues of the Stanford Social Innovation
Review (SSIR): http://www.ssireview.com/articles/article.php?article_num=205
- "The M Word: A Board Member's Guide to Nonprofit Mergers" - Written by CompassPoint staff Alfredo
Vergara-Lobo, Jan Masaoka, and Sabrina L. Smith, this guide provides a road map to a merger's expectations,
processes, and obstacles. Special sections depict seven organizations' actual merger experiences,
feature sample resolutions and worksheets, and highlight the key roles executive directors and funders
also play in a merger. It goes beyond the negative connotation associated with the word "merger" and
also offers advice on how to close down an organization. This guide is produced by CompassPoint Nonprofit
Services, with support from The San Francisco Foundation. this guide is available for sale for $12
(plus tax and shipping through CompassPoint: http://www4.compasspoint.org/p.asp?WebPage_ID=712&Profile_ID=204305
- "Why Local Politicians Matter to Nonprofits" - Feature article in March/April 2005 Grassroots
Fundraising Journal. Author Patrick McLean shows how local politicians can play a valuable role in
helping nonprofits meet their goals-and vice versa. This is a great article about developing mutually
beneficial relationships with local politicians, including tips on meeting protocol, crafting your
message, and easy ways to help elected officials learn about your organization. Download the article
from the Grassroots Fundraising Journal website: http://www.grassrootsfundraising.org/.
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