Advocacy

Info You Can Use: We Are More Than Just Our Overhead Ratio

by

Well, the timing could be a little better.

Part of the big news today is that GuideStar, Charity Navigator, and BBB Wise Giving Alliance joined together to sign an open letter to all donors asking them not to use overhead as a primary criteria for giving.

The letter does a pretty good job in a short space of discussing how inaccurate the ratio is and the consequences for non-profits when they feel they have to hobble themselves to maintain a low number.

The letter specific cites Stanford Social Innovation Review‘s article, The Non-Profit Starvation Cycle which does a good job explaining the problem in detail.

The reason why I said the timing could be better is because it comes on the heels of a weekend where CNN has been majorly featuring a story about charities that have been fleecing donors with the causes only getting 4% in some cases.

Now make no mistake, I am not defending a 96% overhead by any means. There are a lot of scams out there and it appears pretty clear that the organizations featured in the story set out to deceive right from the moment they generated names that sound very close to nationally recognized charities.

My concern is that to people unfamiliar with charities, the timing of the letter’s release makes it almost appear to be an apologist for the high overhead ratios these dishonest groups had. Especially since a picture of the website of the one of the groups CNN damns contains a claim that Charity Navigator gave them a 3 star rating.

The proximity of these two announcements aside, the public recognition that charities should not be judged on overhead alone is a real advance in the effort to get non-profits evaluated on less superficial criteria. It will likely still happen for some time to come, but it is an encouraging sign.

Before There Was Rocco..

by

…there was Anthony Radich.

Looking back at some of my old entries, I was surprised to find I had forgotten that five years before Rocco Landesman uttered his infamous blasphemy/straight talk about there being too much art, Western Arts Federation Executive Director, Anthony Radich had suggested killing off arts organizations.

So let’s euthanize some arts organizations. Let’s pull some of the nonprofit arts programming off the arts-production line and free up funding and talent for reallocation to stronger efforts–especially to new efforts tilted toward engaging the public. Let’s return to the concept of offering seed money for organizations that, over a period of years, need to attract enough of an audience and develop enough of a stable financial base to survive and not structure them to live eternally on the dole. Let’s find a way to extinguish those very large groups that are out of audience-building momentum and running on inertia. Instead of locking arts funders into a cycle of limited choices, let’s free up some venture capital for new arts efforts that share the arts in new ways with the public.

I guess everybody takes note of the director of the National Endowment for the Arts, but forgets about what the head of an equally important regional arts service organization says.

As with Rocco, the issue is much more nuanced than at first glance. I wrote about it and there was some good discussion on Andrew Taylor’s blog at the time.

I’m My Own Idea Czar

by

La Piana Consulting blog had a post a few weeks ago about how the dynamics of non-profits can crush new ideas and creative approaches to problems.

Their last suggested solution to avoid this is to appoint an “Idea Czar”:

“Appoint an “Idea Czar” from outside the senior management ranks. This person becomes a human suggestion box, an ombudsman for creativity. Anyone with a novel idea that might answer a current challenge is invited to share it with the Idea Czar, who periodically reports on what he or she has learned at management team or board meetings. Then use those reports to dive deeply into a specific question that piques the particular group’s interest or that the CEO would really like the board’s or management team’s best thinking on.”

I walked around most of today pondering whether this could actually work. I mean, it would require someone with enough seniority and experience to be taken seriously by management, but who also hasn’t been around so long that they are cynical about the viability of ideas. Even if the didn’t discount them immediately, they would need to be idealistic and energetic enough to effectively advocate for the idea in the face of a resistant board and senior management.

I recognized fairly early on that in my venue the idea czar would be our assistant theatre manager. (I am fairly idealistic, but she tops me.) This made me realize that it isn’t enough to appoint someone on staff into the position, if you really want to break out of a status quo, the hiring process has to involve actively recruiting people who possess idealism and strength of character to advocate in the face of a tendency to say No.

Apropos of this, Barry Hessenius posted this week about how one can be their own best/worst gatekeepers in terms of openness to “good ideas, new thinking and ways to actually be better managers, administrators and leaders; opportunities for new projects, collaborations and ways of seeing our world.”

Just as this problem of gatekeeping can manifest on both a personal and organizational level, the solution can probably be implemented on a personal and organizational level.

It probably isn’t enough to appoint a person to be the company idea czar if the board and administration are going to perpetuate an environment that is hostile to new ideas. Management and leadership should practice self-advocacy by setting aside time each week to entertain new ideas in the same way 3M, Google and Hewlett-Packard give employees time each week to develop new ideas and products.

Management and leadership might use this time to read websites they bookmarked, jot down what interesting ideas they have and then go back to ideas they jotted down in previous sessions. I think this last step is important because realizing you had forgotten some of the great ideas you had had weeks before serves to reinforce that fact you have the capacity to have good ideas.

Even if none of those ideas ever travel from the idea journal into practice within the company, the very act of engaging with new ideas, looking at them, turning them over a little, before putting them away, helps the mind practice accepting and handling new ideas rather than simply rejecting them.

Info You Can Use: NP Orgs Exist In Shadow Universe (Great Resource Guides Too)

by

My Twitter feed delivered me two great resources for arts professionals on the same day this week.

The first came courtesy of Sydney Arts Management Advisory Group. I guess I should have known that when they talked about a guide developed for “WA Artists” they meant Western Australia and not Washington State. In my defense, they link to a lot of prominent U.S. arts sources (like me!).

The guide they shared, Amplifier: The Arts Business Guide for Creative People, from Propel Youth Arts, is really one of the best guides for creatives just starting out that I have come across. If you cut out the resource guide at the end of the booklet, 98% of it is applicable to a creative anywhere.

The guide is really accessible with fun illustrations and interviews that will probably make you want to move to Western Australia. It also walks you through all sorts of planning processes with questions and checklists: project management, business plans, identifying markets, goal setting, evaluation, finances & funding, legal, product, pricing, place and promotion.

It doesn’t just deal with performance, but also tackles film, visual art and publishing, delves into copyright law (which appears almost identical to U.S. law) and licenses.

The guide also spends a few pages on risk assessment and insurance for events which is something I have never really seen in similar guides even though it is very important.

The second resource comes from the Wallace Foundation. This one is more geared toward arts groups rather than individuals starting out and is focused on administrative issues like finances, board oversight and administration.

You may have seen some tweets about it but not followed the link. It is really worth stopping by to take a look.

Some of the guides and case studies are what you might expect “Building Stronger Nonprofits Through Better Financial Management” and How to Talk About Finances So Non-Financial Folks Will Listen.

But there are some with more intriguing titles like: “Efficiency” and “Not-for-Profit” Can Go Hand in Hand,  and The Looking-Glass World of Nonprofit Money: Managing in For-Profits’ Shadow Universe.  

The latter is described as” Especially useful overview for board members with little exposure to the unique nature of finance in a nonprofit context.” I  never really thought of NP orgs as operating in a shadow universe. Sounds so cool! Does that mean Rocco Landesman was the dark emperor or something while he headed the National Endowment for the Arts?

There are also proposals like “The Nonprofit Starvation Cycle” which advocate for changes in the way foundations support non-profits.

The part of this resource I have seldom seen in other places was a whole section of five articles, including a podcast, on figuring out the True Cost of programs. They specifically have a calculator for figuring out the cost of after school programs, but following the steps outlined in some of the other articles can help reveal truths like social media isn’t actually free.

I haven’t read through everything in the guide, but I am definitely going to bookmark it for future reference.