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Stuff To Ponder: Alternatives To Forming A Non Profit Org

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If your new year’s resolution is to do good this year, go for it! But if you are thinking of starting up a non-profit, you should be aware of the challenges you face. Both the normal processes to follow when starting a new organization as well as emerging scrutiny by the federal government. The Non-Profit Law blog has been packing a lot of informational goodness in their posts over the end of last year and the transition in to this one. Among their tweets of the week for last week was news of extra scrutiny of non-profits by the IRS.

The Gene Takagi and Emily Chan who write Non-Profit Law Blog also linked to a piece they wrote for the American Bar Association outlining the considerations a lawyer and their clients should use to evaluate whether they should actually form a non-profit organization. Many of the suggestions made are just good sense for forming any business including evaluating the need, whether it duplicates the efforts of another group, if there is sufficient clientele and a support base present in the community. They make suggestions of alternatives to consider.

But another person they link to in their tweets of the week really does a great job of providing these alternatives. Allison Jones makes suggestions for 6 alternatives with links to more information about pursuing these options.
 I had never heard of an intrapenuership myself.

* Free agent: More and more people are affecting social change outside of an organization. Harnessing social media, you can mobilize your network to take action or support a cause without the hassle of incorporating….

* Informal group/club: If the issue you are addressing is small or very specific (cleaning up a local park or stacking shelves in a local food pantry) you may just be able to round up a group of friends and get to work….

* Giving circle: … In giving circles you pool money and resources together to support an organization you all select. The focus is usually on a local organization, often extends beyond giving financial support, and the circles can be formal or informal….

* Local chapter of a national organization: … You can build on existing resources, support, and guidance to make a difference. Organizations that focus on professions, such as Young Nonprofit Professionals Network, Grant Managers Network, or Emerging Leaders in the Arts, tend to have chapters across the country. However other organizations in different causes, like the Reeve Foundation are open to supporters launching local chapters as well….

* Intrapreneurship: Do you work or volunteer for an awesome organization? Maybe you noticed a need because of the work you do? This can be tricky as many organizations are pressed for resources and time. However, you can harness your organization’s infrastructure to make small steps in addressing the need you have identified. Organizations are more willing to support innovation if there is someone (i.e. YOU!) willing to take the lead. Start by collecting information on the need and presenting it to your organization….

* Fiscal sponsorship: In fiscal sponsorship a nonprofit will allow you to operate under their 501c3 status….You should find an organization whose mission and work align with what you want to do and reach out to them directly….

New Year’s Not To Do List

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So I am back and raring to go. This is the first Christmas holiday season I have been away from my bed in about 10 years. I went back to visit places I used to work and gained some insights and ideas. I bookmarked things to write about when I returned, but it will take a little bit for me to sort and process some of these things in my brain. One bit of wisdom to start off the new year I came across was linked to by Daniel Pink. It was an entry on the Drucker Exchange, a blog maintained by the late management guru Peter Drucker’s Drucker Institute.

The entry titled, Your Not-To-Do-List, essentially advises organizations and individuals to examine themselves and decide what efforts they are no longer going to pursue. It sort of follows the idea that if you bring something new into your house, you get rid of something old. In this case, you are encouraged to get rid of something old to leave room for the arrival of future innovations. The Drucker Exchange cites a 2004 interview in Forbes where Drucker says:

“A critical question for leaders is, “When do you stop pouring resources into things that have achieved their purpose?” The most dangerous traps for a leader are those near-successes where everybody says that if you just give it another big push it will go over the top. One tries it once. One tries it twice. One tries it a third time. But, by then it should be obvious this will be very hard to do. So, I always advise my friend Rick Warren, “Don’t tell me what you’re doing, Rick. Tell me what you stopped doing.”

The only hitch I think arts organizations might have with this is that waning audiences can make many programs look like they should be put on the not-to-do-list when some just need the attention being spent elsewhere to succeed. I think it is telling that Drucker focuses on the almost successes and achieved goals for elimination rather than targeting poor performers. While the latter should certainly be examined for elimination, Drucker reminds us not to become too invested in the moderate successes just because they provide a degree of satisfaction.

I just read the article this morning and spent most of the day catching up with a backlog of emails so I haven’t really had time to ponder what I might want to eliminate both personally and organizationally. However, over the holidays I had been thinking of discussing with the staff a new approach to one of our events with an eye to more closely connect with the local arts community. The old approach to the event might be the perfect thing to put on the top of our not-to-do-list.

Info You Can Use: Google URL Builder

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Technology in the Arts recently had a tip about Google’s URL Builder. Designed to work with Google Analytics, the URL builder helps you track targeted campaigns by putting identifying words or phrases into your links. For example, you can post a link to an upcoming show and mention it on your Twitter feed and Facebook. Analytics will tell you that visits were referred by Facebook and Twitter, but if you inserted a link into posts across the course of a week from different accounts, you don’t know which post or account may have been effective or if the referrals actually come from your posts or someone entirely unrelated to your organization. Creating URLs with identifying information can help you determine how effective different efforts may be.

These links can also be used in emails and newsletters to accomplish the same thing. Tara George who wrote the Technology in the Arts entry notes, “For smaller organizations or independent artists who do not utilize broadcast email service providers (like Constant Contact), Google URL builder could prove to be a viable alternative for tracking traffic deriving from e-mail communication.” I am currently using a email service without these tracking abilities so I thought our “Give The Gift of Live Performance” holiday email campaign might be a good opportunity to use the URL Builder. I inserted a couple different tracking words into my emails to help differentiate between the lists and sat back to see what happened.

Well, there were fewer click throughs than I expected given the low number of opt-out requests we received. On the other hand, the number of ticket orders we received in the week after sending the email closely matched the number of referrals from the email. People who were interested enough to follow a link seemed to follow through with an order. One thing Analytics and URL builder can’t track is number of emails that were opened. There may have been a lot of people who opened the email but just weren’t ready to buy tickets for shows after the Christmas holidays or already knew enough about our performances from our brochure, website and previous emails that they didn’t need to click on any of the informational links in the email.

The tool can also only track when people follow links to URL addresses that you own/control enough to have placed the tracking script in webpages. So you can track visits to www.acmetheatre.org/ElvisShow.html, but not necessarily to the YouTube video the performer posted of Elvis Show. This didn’t immediately occur to me, though it should have, and I placed my tracking words in links to YouTube I included in my email because I wanted to track how many people were interested enough to watch the videos. Now the folks at YouTube will have my “ChristmasNews” pop up as a campaign word if they care to look at their Analytics report.

Tara George suggests asking others to create custom URLs for you or create these URLs for them so that all parties can track responses to interviews, stories, events and other collaborative endeavors that may drive traffic to each respective site.

Info You Can Use: Viral Media and Intellectual Property Guide

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The people over at the Technology in the Arts have been offering some nifty guides and podcasts for performing arts folks. Those I have looked at are fairly concise and easy to consume in a short period in your busy day. One of the more timely guides I have recently seen is about the legal considerations associated with posting video online that you hope will go viral.

As the guide author Amelia Northrup notes, technology has been moving faster than union agreements have been made so it can be difficult to know what is allowed and what is forbidden. Yet there is a fair bit of pressure to have a more extensive multi-media representation on the internet.

“Many of us have received well-intentioned comments from a friend or board member about posting performance footage online. However, there are not a lot of people giving practical advice on how to avoid an ugly legal run-in with your dancers over streaming video or negotiate with a union to ensure you are able to post the video of the third movement of a string quartet to your Facebook page. Building audiences with performance footage is wonderful, of course, but the benefit is nullified when your efforts cause a lawsuit from the composer!”

The guide has some case studies comparing the experiences of different arts organizations, both union and non-, who have worked to broadcast their works over the internet with varying results. Northrup also provides a brief guide to copyright law with a graphic that does a pretty good job at helping you get a general sense of which of the myriad copyright laws may apply to your production. (Though no guarantees you will be completely sure after looking at the graph.)

Northrup also discusses the fair use doctrine and address an assumption I never considered people might make. She points out that since using materials for educational purposes is permitted under fair use and non-profits are classified as educational entities, non-profits may assume there is nothing forbidding their use of protected materials. In short, it just ain’t so. On the other hand, some unions have rules that define use within certain parameters – “Actors’ Equity contracts have allowances for “b-roll,” which is approximately three minutes of footage that can be made publicly available, usually without royalties being paid to the performers.”

The guide also points out that more than just the work of the performers is covered by copyright and union protections and may involve payment of royalties and residuals.

“Artists contribute to the production by creating intellectual property, and therefore essentially become authors themselves. Any art used in the show, such as set, costumes, and lighting design are the intellectual property of these additional artist/authors (lighting designers, technical directors, etc.). This is also often a problem in the entertainment industry. In his book The Future of Ideas, Lawrence Lessig describes the difficulties that movie producers have clearing rights for logos, artwork, even furniture.”

And don’t forget that a video you post online highlighting interesting sections of a performance will also involve the intellectual property work of the video editors and related production crew as well.

The guide includes a list of Dos and Don’ts which reiterates knowing what the rules are, negotiating for the widest latitude of use from the outset and sticking to the agreement. One of the case studies reinforces the “don’t” of assuming the two related unions you are making arrangements with talking to each other, even if they say they are. There was one “don’t” that wasn’t really discussed in the rest of the guide- “Don’t assume that designers, actors, or any other artist or author will automatically equate your organization’s promotions with publicity for them.”

I have never run into an instance where this became a problem between an organization and artists, but I have had encounters where people at arts organizations assumed that an artist or designer wouldn’t mind if they used the artist’s work because it would promote them. I think that could potentially be the biggest area of contention in the future since technology seems to be fostering this attitude. That was the basis for a big discussion debate on composer Jason Robert Brown’s blog this summer. Brown is a big defender of sheet music royalties and had that view challenged by a young woman who felt she was helping promote him by trading his sheet music over the internet. Brown found 4,000 instances of people offering his work for free and was a little concerned about the loss of royalties that might represent. One of the points the young woman used as a counter during their lengthy debate was that he might stand to make money if someone used the free sheet music in a talent show which lead someone else to download Brown’s music from iTunes.

This is a topic that has no quick or easy answers. There are hundreds of comments on Brown’s post debating this topic and from what I heard, visits to his site rocketed into the hundreds of thousands. I daresay the basic conversation about intellectual property and the best intentions of fans when they use it hasn’t exhausted itself yet. You can sue those with malicious intent with a clear conscience. Responding to exploitation by those who adore you is another matter entirely.

Must Read: For-Profit Arm No Panacea For Non-Profit Funding Woes

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If you have ever thought that starting a for-profit arm for your non-profit to help support the latter’s mission, you must read The Nonprofiteer’s post on the subject. I have been hearing it suggested that non-profits embrace these types of arrangements as grants and donations have become increasingly difficult to secure. A study linked to by The Nonprofiteer requires one to pause in such considerations.

Writes the Nonprofiteer of the study:

“nonprofit agencies which choose to support themselves with for-profit businesses end up serving their clients less and worse. Moreover, when the businesses thrive the profits go back into the business, while when the businesses falter the losses are taken out of the hide of the agencies. “

I took a look at the study, “Social Enterprise: Innovation or Mission Distraction,” in which author Rebecca Tekula analyzes the 990 filings of Human Service organizations in New York County from 2000 to 2005. The number of organizations this encompasses is not cited though Tekula writes that the data “represents 700 organizational years” which averages to 116.67 organizations for each of those six years.

What Tekula says she found is that enterprises that yield non-business related income undermine the value provided through the non-profit program-

“As hypothesized, the internal capital markets of nonprofit firms seem to follow that of for-profit firms in that diversification leads to value loss as proxied by programmatic expenditure. What can be inferred from my findings is that this particular type of external enterprising behavior is associated with less value in the programmatic output of human service nonprofits.”

And, no surprise, ineffective programs can be a drain on the resources that should be directed to the effective ones-

“My findings are in accordance with cross-subsidy theories of diversification in which internal budgeting allocates funds to divisions with few investment opportunities (ailing enterprises of nonprofits) while failing to channel funds to those with ample investment opportunities (effective, efficient programs). While this research is a first step toward identifying the factors associated with earned income behavior in nonprofit organizations, there is much work to be done in this area.”

Tekula is careful not to say this will be true for all sectors of the non-profit world and encourages similar study of the arts, healthcare and education. But does caution, (my emphasis)

“Clearly more thought and research must be invested in this area and caution must be given in popularizing and glorifying the unproven benefits of unrelated or external enterprising activities on the very organizations that have become important service providers for society’s neediest individuals.”

Info You Can Use: More Cell Phone Donations

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Back in February I wrote about using texting to donate to charities the way people were doing immediately after the Haiti earthquake. I had noted the high cost of setting something like this up was probably cost prohibitive for most. I also suggested that the costs would likely come down as its use became more prevalent or someone figured out a more efficient way to process the payment.

According to Fast Company , it looks like someone has done the latter. Mobile companies Obopay and Benevity have created a way in which you can text a word, choose your cause and have the money and acknowledgment issued immediately. Not only does everything get processed faster, but there is flexibility in the amount you can donate. According to a press release issued by the company:

“The new mobile giving solution enables charities to collect much higher amounts – up to hundreds of dollars – and provides the non-profit with much faster access to the funds, compared to other text-to-donate offerings that have been limited to $5 and $10 amounts and have taken over 90 days to get funds to the cause.

[…]

…said Bryan de Lottinville, CEO of Benevity. “As personal and corporate philanthropy recovers following the recession, mobile donations and campaigns will have increasing importance. We’re delighted to be part of a new solution that will provide companies and consumers with an easier way to give to causes that resonate with them. We’re also thrilled about making this functionality accessible to all charities and consumers, regardless of their size or the amount they can donate.”

No mention of the costs which I will grant, could be just as high as with the text giving I reported back in February. With faster receipt of funds and increased amount people can give, the costs can start to look more reasonable. Again, as people use it, the costs may come down. This partnership may or may not become the dominant player, but what the CEO says about donating by phone becoming more prevalent is likely true.

Since people tend to act on impulse with their phones, texting and calling their friends as soon as something happens, non-profits may benefit and receive more donations than they normally might if people had to pull their check books or credit cards out. I think it also likely non profits will face donors remorse in the wake of such giving and will need to formulate policies to address it.

Tip You Might Be Able To Use

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With all the discussion of using GroupOn to sell subscriptions and tickets that has been occurring of late, (neatly summarized by Drew McManus last week), my brain was receptive to the mention of a similar service which may be better for both the consumer and the business.

I was listening to the radio when I heard an interview with a representative of a company called Tippr that provides a similar service to GroupOn’s. The benefit for businesses is that they have representatives in every city in which they have a presence who can sit down and structure an offer specific to your company and needs rather than the same arrangement everyone else gets. This includes making sure responses don’t exceed your company’s resources and ability to service them. One of the biggest problems businesses have had with Groupon is being overwhelmed by the number of people seeking to redeem deals. Tippr seems to view themselves as a service that provides growth to businesses rather than a discount deal site.

Which is not to say the consumer doesn’t benefit. Tippr offers three deals a day rather than just one. But the real value comes in what Tippr calls an Accelerated Deal. The more people sign on to deal, the bigger the discount. It starts at 50% but can go up to 90%. Presumably, the business can set a cap on how large the discount grows to.

You won’t see the Accelerated Deal anywhere else. The process was patented by a company named Mercata in the 1990s which went belly up according to Gigaom because, “Online social networking didn’t exist back then, customers were much less likely to spend money online…” Tippr bought the patents on the process.

When I first heard the Accelerated Deal described, I thought it was a system that rewarded early adopters. In my post on GroupOn, I had suggested that with the correct timing, one could use that service to reward people who committed early.

When they first started talking about how Tippr worked, it almost sounded like you could pay $10 for $25 worth of merchandise and then as people joined in the next level of discount would have you pay $15 for the discount which might now be at $30. Except that since the discount was the same for everyone, the person who paid $10 now was getting $30 worth of merchandise. So as the discount increased, the late comers were getting a really great deal, but the early adopters who were driving the whole effort really made out well.

For the business, this could really work out well if you structured the curve of the discount well. Sure, you may end up giving $100 of merchandise for $10, but if the cost of the discount went up to $20 after the first 10 people bought, you limit that exposure. The same if you limit the number of $20 deals knowing the discount will top out at $100 merchandise for $60. If you have a couple hundred people buying at the $60 range when the average sale in your store is $15, it might be good planning. Especially if you know from more modest offers that a fair percentage will return to your store to buy at full price and since they have already paid $60 in your store once, they are inclined to spend more than the normal $15 average.

While that isn’t how Tippr actually works, if more companies enter this market niche, you may see companies using this type of model of obscene discounts for the first responders to differentiate themselves from the pack. Hmm, maybe I should download the patent paperwork….

I am not sure how well Tippr might work for arts organizations. It may make sense for subscriptions over single ticket sales. If earned income is 40% of your budget and you have the potential of discounting your tickets anywhere from 50%-75%, it could be a perilous situation. But it can be absolutely worth it if you decide rather than spend a couple thousand dollars on print and radio advertising, you will forgo a couple thousand dollars in ticket revenue knowing every few dollars lost is a guaranteed audience member. Since Tippr has a representative to sit down with you and listen to your concerns so you can develop a sane plan for how much to discount and limit the number offered, you can also be guaranteed not to incur any more expense than you intended.

Info You Can Use: So You Wanna Join A Board?

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I believe I have covered the subject of considerations to make when joining a non-profit board before, but Emily Chan did a terrific entry on the topic on Non-Profit Law Blog this week. She links to the BoardSource page on this topic at the end, but she reminds us of additional things to think about.

Among her suggestions are to research on the organization you have been asked to join by reviewing the financials, bylaws, ensuring they have board liability and evaluating the personality dynamics on the board and their work process. Chan also mentions one of the areas I think is often overlooked–education. People who are familiar with boards on a basic level will know there are fiduciary and legal responsibilities to attend but may not really push to receive a thorough education in these areas and about the organization in general.

Education: Will you have the tools necessary to succeed at this organization?

Incoming directors at an organization may have different educational needs for creating the right environment to thrive on the board. Factors such as past board experience or work experience in the nonprofit sector can be useful in quickly adapting to a director role and executing those responsibilities. Likewise, an organization’s investment in or opportunity for board development and mentorship may be an important factor of an ideal work environment for individuals who are first-time directors or new to the nonprofit sector. For those seeking board education, a few topics to consider are:

* Orientation: What information will be covered? What are you expected to take away? What type of resources will be provided? Will you need more help or information after this?
* Training programs: Are they offered? If so, do they address the skills and areas you need the most help with? Are they pre-scheduled or provided as needed? Will you need more training and education down the road?
* Job description: What is being asked of you? Are your responsibilities and duties understandable and realistic? Can you fulfill this role?

I also really like Chan’s comments on how to evaluate the personality dynamics of the board, but I didn’t feel I could copy that much of her entry and offer so little original insight of my own. Obviously, the article can also serve as a guide for the materials, information and education non profits should be prepared to present to a potential board member so that a well informed decision is made.

1099s For Everybody!

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I was idly skimming around Inc.com today when I came across a story which raised some concern for all the already overburdened arts organizations out there.

Apparently, a provision of the new health care law will require that any company making a purchase of more than $600 issue a 1099 form to the seller. Even for arts organizations who don’t generally have a lot of money, it is pretty easy to spend $600 with a single company in the course of a year. I can see a lot of arts organizations being driven to distraction trying to comply with this. Especially since arts organizations may also end up receiving as well as giving because of rentals or blocks of tickets people may have purchased for their business.

This law actually may provide a disincentive to shop around for the cheapest price. If it is easier to keep track of everything you spent on hardware at one store, you may avoid the other stores even though they often have good prices on certain items.

Non profits may be exempted for all I know, but there was no mention of that in the six different articles I read trying to get more information on the subject. There are a few amendments that have been proposed. One was voted down today because it tried to dismantle a couple other elements of the bill along the way.

This is supposed to go into effect in 2012 so more information may emerge as Congress tries to sort all the intended and unintended consequences out.

Info You Can Use: Sponsorship and Fundraising Webinars

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Fractured Atlas is tackling sponsorship and fund raising in September with a series of webinars on Tuesdays and Wednesdays throughout the month. It looks like the sessions address Fractured Atlas’ criteria for the programs they run in these areas but also give tips for approaching companies for these things in general. Though if you are interested, you might check. The September 15 session seems to be geared for those who have been accepted into their sponsorship program.

If you have not heard of Fractured Atlas before, ” We help artists and arts organizations function more effectively as businesses by providing access to funding, healthcare, education, and more, all in a context that honors their individuality and independent spirit.” They are always working to expand their reach nationally and I think the timing of the webinars is an example of that. At first I thought they were running them 8:30 -9:30 AM which would put it in the wee hours of the morning for me and not be of much help. On second look, I realized it was in the evening which would serve me and everyone in the time zones between here and the U.S. East Coast much better.

Info You Can Use: Taking Your Marketing Mobile

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A member of the Performing Arts Administrators group on LinkedIn suggested a link to two marketing guides by Kodak. One was on using social media and the other is about using mobile marketing. Both are free downloads.

I looked at the mobile media guide most closely because I have the least idea of how to use that as a technology much less as an effective marketing tool. My initial impression that parts of it wouldn’t be easy to set up were correct. Getting a short code –the four to five digit number to which people text a word or phrase is complicated to arrange.

“Use a short code on a service provider or get a service provider to work with the aggregators on obtaining carrier certification and provisioning according to your planned campaigns and needs. Since every new service requires a new certification, make sure you cover as many services as possible before submitting the campaign for approval, to avoid having to go through the certification process again.”

Both documents provide good background and glossary of terms for those who aren’t familiar with the technologies. They provide examples of campaigns they have conducted, many of which are on a scale and involve resources most arts organizations only dream of. That being said, Twitter allows people to follow your feed on their service by texting to a number. If you created a dedicated Twitter account for promotional efforts, you can have information and links to all sorts of specials sent to people’s mobile devices without dealing with the carrier certifications. It appears you just need to text “follow (feedname)” to 40404 in the US. The code is different in other countries.

Kodak encourages people to evaluate if the technology is the correct fit for their organization. They also offer Do’s and Don’ts for campaigns. The one they provide for mobile marketing seems obvious as a step for keeping spam off mobile devices.

“The rule for viral messages is that they can only be sent by non-commercial entities who manually select a recipient to receive it. Messages forwarded by automatic means, originating from a commercial source, or offering inducements to forward messages are definite “don’ts”.”

At first I just thought it was an ethical rule, but since the next section advises you to consult a lawyer about what is and is not permissible, I wondered if it might be a Federal law created to squelch spam before it started. As always, the best rule of thumb with most communication media remains true — be careful you aren’t annoying people.

As The Brochure Folds

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I am in the process of having our season brochure designed for the upcoming year and it seems like the way the brochure is folded is taking great precedence over the actual content of the piece. Because of postal regulations about the way items may be mailed the printing houses are suggesting we change the way we fold the brochure. It will be the same size and shape as we had planned, but will require fewer seals to hold it closed when we mail it. Fewer seals means a savings in the printing and mailing.

Except that the way the brochure opens is very important. More to the point, what people see when they first open the brochure is very important. A few years back, the first thing you saw when you opened the brochure were the compelling eyes of an Indian dancer. People opened the brochure and had a real “wow” experience. Last year we used a different designer and she took another approach to the arrangement of the information. Instead of an image, the first thing you saw was text. It wasn’t as ideal a situation in my mind, but the design positioned information in a better place for those who attached the brochure to refrigerators and bulletin boards as reminders. (We get a lot of ticket orders throughout the year from people who keep our brochure.)

The text people first saw last year when they opened the brochure dealt with our flex subscriptions and volunteering. Both areas saw an increase in participation last year proving that I really need to pay attention to what is on that first panel. I will be getting a full size sample to proof from the designer tomorrow. You can be assured one of the first things I will do is figure out how it folds and open and close it many times to determine what our patrons’ experience is going to be like.

I mention all these factors, of course, by way of pointing out the practical application of the various considerations you might employ when designing brochures.

Info You Can Use: Understanding Financial Statement Basics

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If you are new to a position as board member or administrator of an arts organization or if you have simply resolved to become better educated about your business’ financials, Inc magazine offers a series of articles comprising a quick primer on what they all mean. This month’s article is “How to Understand an Income Statement.” This is a good place to start if you don’t know the difference between an income statement and a cash flow statement.

It is especially a good place to start if you don’t know how a company can be extremely profitable, but unable to pay its bills each month. There are also articles on how to identify why you can’t pay your bills each month too.

If you have no idea where to begin and what is important to look at, they have articles on tracking the pertinent numbers and help you with a basic understanding of what they are and why they are important.

Of course, it is good to remember that there are some measures which a non-profit doesn’t adhere to — like profit ratios on ticket sales when it is already known that earned revenue isn’t going to cover experiences.

Info You Can Use: Considerations Before Forming A Non-Profit

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Last month, as many non-profits were faced with losing their status due to a change in the tax filing laws, Board Source President/CEO Linda Crompton suggested the situation might be good for the non-profit world by removing duplicative and ineffective/inactive non-profits. Because non-profits really aren’t required to generate a business plan or survey the need and competition before filing for status, she feels there may be too many non-profits in existence.

No for-profit company would start up without doing a thorough analysis of the competitive landscape; that analysis would be baked into the business plan and would inform all other decisions — one of which might be “not here, not now.” It’s incumbent upon our sector to school itself on this point: just because we have an idea, and a mission, and a great, good heart, does not mean that we need to start our own, brand-spanking new organization to fulfill that mission. The same truth applies to organizations in all stages of their lifecycle. Boards should be asking themselves: are we still relevant? Are we fulfilling our mission effectively and sustainably? Is there another organization across town doing the same thing, only better? Should we be discussing merger, or even dissolution?

I have mentioned a number of times over the years that I have often many arts organizations have been started that could have easily been part of an existing group or that could have merged with other groups when it was clear that their service area couldn’t support both groups very well. I will admit that I have seen many more groups in merger talks over the last few years since the economy has gotten worse than I had during previous economic down turns. It was good to see people considering this route. But I have also seen new groups peel off because of personality differences or a desire to perform a slightly different genre. Admittedly there is a difference between classical and modern realism, but Shakespeare festivals manage to produce both without compromising their souls.

To be honest though, I don’t know if the IRS would be in a position to evaluate whether there was or wasn’t a need for any type of non-profit, be it an arts organization or social service agency. Imagine the work involved in developing criteria to measure if there was a sufficient support base for the organization in a community. Imagine the bad press the IRS would get for denying someone non-profit status for a social service organization serving a very emotionally charged cause.

Which doesn’t mean due diligence shouldn’t be done. In a comment to Linda Crompton’s entry, Don Griesmann links to an entry on his blog in which he enumerates all the considerations that should be made before creating a non-profit. He also footnotes his arguments with the largest number of stories on the difficulties faced by non-profit organizations I have ever seen.

His entry came at the end of 2009 and he proposed that no new non-profits should be allowed to be created in 2010 unless a whole multitude of conditions were met. A brief sampling:

•Unless you understand the nonprofit will not be “your nonprofit” and you have enlisted an incorporating board that is interested in the concept and capable of performing the necessary tasks of incorporating and operating the organization and

•Unless you understand there is no “free money” from the federal or state governments. The federal government distributes funds through scholarships, fellowships, contracts, grants and loans. Each requires an application, meeting eligibility requirements, demonstration of a task to be undertaken, proof that the task was performed and the money used appropriately and in many instances a report evaluating the use of their funds…

….•Unless you have a concept of what it costs to develop and operate a nonprofit in terms of shared leadership, time, thought, study, serious planning, hard work, evaluation and annual reporting as well as money and
•Unless you have no intention of attempting to raise more than $5,000 a year for the next 5 years…

…•Unless you have performed due diligence and created a board of mixed talents, diversity, shared passion and vision concerning a truly unserved issue or need supported by some empirical evidence. If the need is an underserved need, why not join with the current providers and increase the service or product? And
•Unless you understand that there simply are not grants available to pay for the incorporation process. If you and others cannot raise the first $1,000 or so to incorporate, then where do you think you will get the money to run the organization? When someone asks, as many do, does anyone know where I can get a grant to start my nonprofit, we should either not respond or tell the truth – you are not ready to start a nonprofit. Go volunteer at a local nonprofit….

One of his next “unless” includes having a business plan that answer 19 different questions. One of his other conditions might be that you shouldn’t form a non-profit if you don’t have the patience to read his whole entry. While it is very long, it asks many pertinent questions and raises many points that ought to be considered. It is good to see people starting to advocate for this level of consideration prior to forming a non-profit.

Of course, non-profit status covers a lot of situations, including block associations and other purposes that wouldn’t necessarily be competing for grants from a shrinking pool of resources. These will certainly benefit from being well planned, but aren’t likely to struggle to stay in existence or become a drain on their community if they don’t meet every criteria.

Info You Can Use: Cost of Volunteering

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Hopefully if I have planned well, the next post you see will be written by me upon my return from vacation. I have sort of saved the best for last. In this 2005 entry, I covered a study about the costs and benefits of volunteering. I think the topic is still very relevant because people probably don’t examine whether they are using volunteers to their best effect and if the time, energy and materials invested in training a volunteer is at least balanced by the volunteer’s productivity. There is also the shifting expectations of volunteers about their experience.

An excerpt from the entry-

One very interesting observation that the study makes is that half of the participants in the survey were unwilling or unable to accept more volunteers at the time. “This finding fundamentally challenges the assumption that the only requirement to engage more citizens in volunteer service is an effective call to serve.”

Consolidating Back Office In Columbus

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I was listening to NPR this weekend and caught a story about Columbus Association for the Performing Arts CAPA, a Columbus, OH organization which area arts organizations have contracted to perform administrative functions.

About a year ago, I wrote about the excellent series the Non Profit Law blog did on the experiences non-profits have encountered merging their administrative functions.

Most of the examples used in that series were social service organizations so it was of some interest to hear a little about how arts organizations were entering the same arrangement. I wondered if it might become more prevalent in these tough economic times given that six Columbus area arts groups entered into arrangements with CAPA in the last year and a half. (This assumes there are businesses around the country who are able to offer these services. Not aware of too many in existence.)

I share a similar concern as Russell Willis Taylor quoted near the end of the piece. Relationships really matter when making the specific case for your organization in the community. Since CAPA seems to have varying scopes of responsibility with each client company, presumably an organization can reserve certain functions for itself and perhaps be involved with CAPA’s efforts on their behalf. But for a lot of artists and groups, the temptation to cede those functions to another so they can concentrate on creation of work alone may prove seductive. In the long run, their presence and public profile may wane as a group like CAPA’s waxes due to their adroit handling of so many responsibilities.

I don’t doubt that an arrangement with a group like CAPA can be extremely beneficial. Large for profit companies outsource their accounting, human resources, marketing, advertising and other functions all the time to great effect. But they also work very closely and stay very involved in every activity affecting the public image of their product because that is what is necessary.

As a little aside- I must confess that I had a moment of glee when I heard them describe the political cartoon implying CAPA is taking over. That anyone feels an arts organization is growing too powerful is so novel a concept, I can’t help but feel some joy. I mean, I don’t think I have heard anyone accused of that since the late 19th century with the Theatrical Syndicate. (Okay, I will grant you Clear Channel/Live Nation.)

Info You Can Use: Intern or Employee?

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A few weeks ago I did an entry on the social impacts and elements of internships in the arts and very briefly referred to the question of whether unpaid internships were legal.

It only occurred to me later that the whole legality question wasn’t really dealt with very well. I read a lot about it, but didn’t really pass the information along or give readers the sense of urgency to follow through.

Well, hat tip to the ever resource full Non-Profit Law Blog which linked to an entry on Blue Avocado which really tackles the question in much greater detail than the NY Times article I had linked to in my previous entry.

The federal criteria to which you must adhere according to Ellen Aldridge at Blue Avocado are:

1. The training, even though it includes actual operation of the facilities of the employer, is similar to what would be given in a vocational school or academic educational instruction.

2. The training is for the benefit of the trainees.

3. The trainees do not displace regular employees, but work under their close observation.

4. The employer that provides the training derives no immediate advantage from the activities of the trainees, and on occasion the employer’s operations may actually be impeded.

5. The trainees are not necessarily entitled to a job at the conclusion of the training period; and

6. The employer and the trainees understand that the trainees are not entitled to wages for the time spent in training.

You must meet all six or else pay minimum wage. Number 4 is probably the toughest to adhere to. The fact that non-profits can have volunteers adds another dimension to the whole question. You should really read the entry because I can’t get into all the nuances like laws dealing with stipends and the nature of functions being performed without reprinting the entire entry. There is, in fact, a significant difference between an intern and a volunteer, part of which determines the type of work each can perform.

At the end of the entry, Ellen Aldridge recommends two NY Times articles on the topic. The first is the one to which I linked in my previous entry. The second is the guidance the California Labor Department provided on the subject of unpaid internships.

The guidance really just supports the expectations an intern would have of their experience– something relevant to their career goals and not predominantly copying and filing.

In that situation, the agency suggested that payment was not required if an intern “performs culinary tasks directly pertinent to his or her education only, is closely supervised,” and “does not displace regular workers.” But, the agency said, if a restaurant required an intern to bus tables or wash dishes, that would probably be considered an employer-employee relationship and the intern would most likely have to be paid.

Mr. Balter cited another guidance letter that said film studios should pay college students who do routine work like delivering messages, filing tapes and clipping newspaper articles, partly because the work was so similar to that of regular employees and could displace such employees.

In the new guidance, the agency noted that it had previously concluded that interns should be paid if they did any work normally done by a regular worker.

But showing more leeway, Mr. Balter wrote that interns could do occasional work done by regular employees, as long as it “does not unreasonably replace or impede the education objective for the intern and effectively displace regular workers.”

This is only the interpretation in the state of California, and a recently altered one at that. Your state may differ so it will be prudent to see where things stand locally. It is promising that they take their lead from the 10th Circuit Court of Appeals which is considered more moderate than the 9th Circuit in whose jurisdiction California falls.

Info You Can Use: Foreign Guest Visas

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Arts Presenters has recently alerted their membership to a proposed change in the way visas for foreign artists are evaluated. According to Artists From Abroad, O Visas are given to “only one alien of extraordinary ability in the arts entering the U.S. to work in his/her area of expertise. “Extraordinary ability” for purposes of the arts is not an especially high standard. It means “distinction” which, in turn, means a high level of achievement in the field, substantially above that ordinarily encountered.”

This differs from the P-1 and P-3 visas, the first of which applies to groups of note with a long term association and the latter which requires cultural uniqueness.

The nature of my work is such that I don’t use O visas. As I understand it, the problem with emerging with the O visa is that Customs and Immigration are proposing “45-day cap on the amount of time allowable between engagements.” Since an O visa can be valid for up to three years, it is feasible there would be gaps in activity of 45 days here and there during this time.

If you do use O visas or have the potential of doing so, you may want to review the page Customs and Immigration has set up soliciting feedback on the proposed changes.

If you need help framing your feedback, Arts Presenters is encouraging people to contact Leah Frelinghuysen, Director of Public Affairs.

Even if you don’t use O visas, Arts Presenters is advocating for changes in the whole visa process because it has been incredibly frustrating and problematic for people trying to bring tours together. Keep your eyes open for opportunities to provide feedback and comments as those policies (hopefully) come under review.

Info You Can Use: DON’T FORFEIT YOUR NON-PROFIT STATUS!

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I can’t believe I forgot to post this since the booking consortium I belong to had a brief heart attack until we realized we were in compliance.

According to the NY Times, about 1/4 of Non-profits will automatically lose their non-profit tax status as of May 15. Not for profit organizations that made less than $25,000 a year didn’t used to have to file. A law passed in 2006 said any non-profit that doesn’t file for three consecutive years will lose their status. Since that covers calendar years 2006-2009, that means the end is nigh for a lot of small organizations. Groups this small may not have kept their contact information up to date and didn’t receive the warning letters the IRS sent out in 2007.

This may not impact the large arts organization you work for, but the smaller charities, trade associations and membership groups (maybe your block association?) to which you belong might be at risk.

The good news is that all you need to do to comply is send back a postcard form informing the IRS that you are still exempt from having to file the full 990.

Even better news–you can file this postcard, the 990-N electronically online at the IRS website.

Stuff You Can Use: Free Classes!

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Okay, very short entry today so that no one thinks tl;dnr from just a glance.

Fractured Atlas, which is doing a pretty great job gluing the artistic world together, is offering FREE online classes which you can start, pause and continue at your leisure.

From their blog announcement making the courses free (my emphasis so nothing is overlooked.)

Currently, there are six courses (on marketing, fundraising, professional identity, social media marketing, working with agents, and getting your sh*t together) and two video workshops (on independent contractors vs. employees, and wellness programs for dancers). We will be launching four to six more courses during April and May (on audio description for performances, presentation venues, board development, fundraising letters, financial planning, and producing) and more video workshops are in the works.

You have to sign up to be a member, but the Community Membership is free and that is all you need to access the classes. You may, however, be interested in the insurance and other benefits they offer with a paid membership so it can be beneficial to look around a little.

I just signed up myself after years of reading their blog. While I am pretty sure I have my sh*t together, you just can’t pass up the opportunity to check that out. (And I strongly suspect there may be people I am going to encourage to take the class.)

Stuff You Can Use: Ticketing Software

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David Dombrosky, Executive Director at the Center for Arts Management and Technology posted a link to the results of a Ticketing Software Satisfaction Survey they conducted last year.

They broke down the results by small, medium, large and very large organizations as defined by budget. They looked at what software, services and features people were using at each level to serve their audiences. I will reiterate the report–the respondents were self-selected so the results should not be construed as representing the market share of each ticketing option.

I didn’t scrutinize the report much and what I was looking for was assuredly defined by my own criteria for a ticketing system. The thing I was interested to find as a low priority feature was barcode scanning. It makes sense that small organizations wouldn’t need it but even the very large organizations didn’t see it as a top feature. I wonder how many of those who have the ability to process bar codes actually use it.

I guess I am somewhat sensitive to the issue because our events are listed on a site that sells athletic tickets with the option of printing a pass a home. Occasionally someone asks us about that option. For us the cost is far too prohibitive and too few people order in advance to actually use the print at home option. Had we more seating capacity, it might make sense to scan the bar codes on the tickets to expedite the processing of all the at gate ticket buyers.

Even if you aren’t interested in reading about all this, the end of the report can be helpful if you are looking for new ticketing services. There are three pages of questions to ask and things to look for when evaluating ticket systems for your organization.

Info You Can Use: Employee or Independent Contractor

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As usual, the folks at the Non-Profit Law Blog provide some useful links. I will quickly point out a short piece about the Senate has recently passing a jobs bill that will provide incentives to hire and keep employees.

The measure would exempt private employers, including nonprofit groups, from paying their share of Social Security taxes for employees they hire through the end of 2010. The new hires must have been out of work for at least 60 days.

They would get an additional $1,000 bonus if they kept the employee on the payroll for a full year

I had heard about this a few weeks ago, but it never occurred to me that this would be a real boon for the non-profit world where a little savings can go a long way. I wish I could remember where I heard it, but I was listening to a radio show where one of the panelists said he wished the money going to public works was directed to non-profits because you could create hundreds of non-profit jobs for every construction job created.

The main of what I wanted to discuss is examining the employment status of people who work for your organization. According to Jessica R. Lubar, a lawyer at Venable LLP, the IRS is undertaking a study of employment tax compliance. They will be focusing on three areas: worker classification, fringe benefits and officer compensation.

What I wanted to point out specifically was the issue of worker classification. I know of a number of organizations that call those who work for them independent contractors so that they don’t have to attend to any of the tax withholding details. However, if the IRS doesn’t call them the same thing you do, there could be a lot of trouble.

“A worker is considered an employee if the employer exercises the requisite amount of control over the employee under common-law principles. Over the years, the courts and the IRS have articulated certain factors that are considered in making that determination. The IRS organized the factors that are considered into three categories: (1) Behavioral Control – whether the business has a right to direct and control how the worker does the task for which the worker is hired; (2) Financial Control – whether the business has a right to control the business aspects of the worker’s job; and (3) Type of Relationship.”

If you have made a mistake in classifying an employee as an independent contractor, there is an opportunity to rectify that situation and obtain relief from the penalties of that mistake. Lubar outlines these in the entry. You would obviously want to consult a lawyer because I am already confused by the first of the three requisite criteria–not treating a person like an employee. That seems to me to imply you have been treating the person like an independent contractor which means you are in the clear.

Perhaps the distinction is in whether you contractually had the right to behavioral and financial control but never enforced it thereby treating someone as if they were an independent contractor when technically they were not.

Guess that is what the lawyers get paid to tell us.

Info You Can Use: Will You Have To Get Rid Of Your Wireless Mics?

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You may or may not be aware that after June 12, 2010, you will no longer be able to use wireless microphones that operate in the 700 MHz range. Arts Presenters has been following this issue very closely and has put together a good resource page on the subject. The page contains information on the ruling and has a link to help you figure out if your wireless mics operate in that range. If they don’t, you can keep using them. Some microphones can be re-tuned to operate outside that range which may also be good news.

I say may because APAP also hosted a conference call on the subject. The transcript may be found here. According to one of the speakers, Matthew Nodine, chief of staff for the FCC wireless bureau, the FCC has made room in the UHF band for all those displaced by this ruling. The question is whether you can stay there or will have to move again. From my reading the experts answering the questions don’t give any concrete assurances that wireless microphones can operate in that area over the long term. They even mention there are a number of other interests who wish to operate in the same area of the white space on an unlicensed basis.

“You have competing interest in the white spaces proceeding which has to be resolved for the commission to decide exactly what rule is going forward that should apply to wireless microphones, should apply to other users, should apply to the licensees and the other licensees in the band.”

There seems to be potential for being bumped from where you are operating at a later time if the FCC decides that space should be used for WiFi or cell phone internet operations. (Just as an example. I have no idea if operating in this span of bandwidth is viable for these functions.)

On a more positive note, it sounds like theatres could actually secure some frequencies by becoming licensed to use them. (my emphasis)

“The FCC is basically setting up a licensing opportunity as one of the possible destinations for operations on a permanent basis in the TV core spectrum. The value of licensing as you may have guessed is that you have enhanced interference protection as against white space devices. You are permitted, and I will just leave it there. You also have interference protections as against all unlicensed operations. You have flexibility to conduct two-way wireless mic related operations. Queuing is permitted for licensed operations for production personnel. It also permits certain types of uses of wireless devices to key stage hands, so sort of backstage uses which are related to performance. All are encompassed under the authority which licensed operators to which they are entitled.”

If you do employ a lot of two way communications, getting licensed may be a necessity. (again, my emphasis)

On the unlicensed side, if you chose not to be licensed, it seems like first of all the only sort of interference protection that you would enjoy would be to operate on certain set aside channels in the TV core where white space devices are not allowed to operate. I think this is a proposal in the commission’s order, but it says that such operations will be limited to 50 millowatts, 5-0 millowatts max power and would probably be limited to one-way only operations. …. it seems as if the queuing and the backstage kind of radio access, the two-way capabilities are very much a part of the performance experience and part of the production values which have been built into certainly into any sort of serious professional production. It looks to us for this particular community of users, that licensed use has a lot of the characteristics which really are the bedrock of any sort of quality performance.

What happens if you keep operating your 700 MHz devices after June 12, 2010? According to FCC wireless chief of staff Nodine,

“There are penalties that are going to be associated with wireless microphone system user who is using their wireless microphone system in the 700 megahertz range after June 12th. We don’t know – we can comment on what we believe those are going to be. And that’s probably going to be a, a fairly wide range of both civil and potentially criminal penalties. And it will be looked at on a case by case basis.”

Info You Can Use: Cell Phone Donations

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If you have been excited by the prospect of using cell phones as a mode of donation after hearing of the success in raising funds for Haiti, you may want to do some research and calculations. The cell phone and credit card companies have gone out of their way to make it easy to donate for Haiti relief and waived most of the ancillary costs.

You on the other hand, probably won’t be so lucky.

Hawaii Public Radio had a short piece covering a meeting sponsored by a local foundation on the subject of cell phone donations this week. (link downloads mp3 file. This link if first doesn’t work. Look for raising funds..social media) A representative from a cell phone company talked about the costs to set something like this up- $500 set up fee, $400 monthly fee and a a .35 per transaction fee.

With costs like that, it would likely only be worth your while if you had a large group of people already giving that you wanted to provide an alternative mode for donating.

Now that said, I can easily see the costs coming down as those for whom it makes sense use the service. Once all those involved with the transactions create more efficient processes, the service may become more affordable. Someone is likely to invent an app for the iPhone or Facebook which will facilitate the whole exchange and two years from now it will be a $2 billion business in $25 average increments.

Another observation that is made in the story related to social media was in regard to who one puts in charge of coordinating it. One speaker cautioned against putting the youngest person in the office in charge of social media just because they understand the software the best of anyone. “They know the tools, but they don’t understand the sophistication of your message and they don’t always understand the intangible qualities…of how you actually communicate with people out there.”

I have a suspicion this is something a lot of people have already thought to themselves but were afraid to say it for fear of showing just how out of touch with social media and its great power they are. It just takes a visit to sites like Failbooking.com to see some pretty poor choices when using Facebook. Though to be fair, I sort of question the wisdom of this water safety ad by Royal Life Saving Society Australia.

Information You Can Use: Tax Treaties and 30% Withholding

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I was recently fortunate enough to get into a conflict with my disbursing office on the subject of the 30% withholding for foreign performers.

Well, admittedly, I didn’t feel lucky at the time. The whole issue is very confusing and time consuming. However, the outcome is such that I am a good deal wiser and more informed about the process. And more importantly, I managed with the help of the artist’s agent and the IRS to secure full payment for the foreign performers.

For those of you who may not be familiar with the issue, count yourself lucky but also be aware that you may become embroiled in a situation requiring you to withhold 30% of an artist’s fee in the future in the absence of a treaty or the proper tax paperwork. I did a couple entries about five years ago which you may want to take a look at to gain some background.

The group we were looking to bring is coming from New Zealand. Their agent was on the ball and sent me the requisite tax paperwork claiming exemption back this summer. Not wanting to have any problems crop up when it came time to send the deposit, at the end of July I sent a memo accompanying the paperwork which included the details of the engagement asking if the 30% would be withheld. I was told it wouldn’t be. It wasn’t until the check was cut and on its way over to me that the decision was made to cancel that check and issue another one less 30%.

At question was Article 7 of the US-New Zealand Tax Treaty which reads:

“The business profits of a Contracting State shall be taxable only in that state unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein. If the enterprise carries on business as aforesaid, the business profits of the enterprise may be taxed in the other State but only much of them as is attributable to that permanent establishment. “

The agent provided an interpretation where the first Contracting State was NZ. Our disbursing office interpreted the first Contracting State to be the U.S. and deemed the performance to be goods “created” in the U.S.

In came the IRS to the rescue! You won’t see that phrase too much in life so let me say it again. In came the IRS to the rescue!

The Central Withholding Agreements office provided the following guidance which they have given me permission to reprint for your edification. Be aware that all countries have different tax treaties, but many of them are very similar to the one the US has with New Zealand so this information can be applicable in many cases.

In the following, “business entity” refers to a production company or other type of operation which owns the rights to the production and performances being presented. The presumption here is that the artists/performers are either employees or contract players for the business entity, having no ownership interest or risk from loss in the production, thus making the business entity, rather than a venue or other payer, the withholding agent for payments to the artists. Payments to these performers would be subject to rules, regulations, and treaty considerations for the individuals as artists. The business entity may apply for a tax treaty benefit with regards to payments made to the business entity if the business entity is permanently located in a country that has a tax treaty with the United States.

A valid withholding certificate, W-8BEN, presented by the business entity to the venue is used to claim a tax treaty benefit for Business Profits. CAVEAT: The business entity MUST have a US Employer ID Number on the form W-8BEN to qualify for the exemption, otherwise 30% of gross income is required to be withheld and deposited with the US Treasury on behalf of the business entity.

Tax Treaties between the US and other countries are worded so that each country reads it and approaches it as a reciprocal agreement. In each case, the “Contracting State” is the country of residence of the business entity and the “other Contracting State” is the country in which they are performing services for remuneration.

Therefore, a US business entity applying Article 7 of the US-NZ tax treaty would use the US as “Contracting State” and New Zealand as the “other Contracting State” thereby claiming exemption from tax in NZ but being subject to full taxation in the US. The business entity could not claim exemption if they had a permanent establishment in NZ.

SIMILARLY, the NZ business entity would flip-flop the terminology taking NZ as the “Contracting State” and the US as the “other Contracting State” thereby claiming exemption from US taxation and subjection to full taxation in NZ. The business entity could not claim exemption if they had a permanent establishment in the US.

As a result, a non-resident alien business entity as described above will provide to the venue a Form W-8BEN claiming the business profits tax treaty provision. The venue is relieved from any withholding responsibilities for payments to the business entity.

The business entity is still required to withhold and deposit on any payments made to or for the benefit of the actual performers.

For the withholding requirements on the individual non-resident alien artists or athletes, you may contact the IRS at CWA.Program@IRS.gov

It should be noted, that while the payment may be exempt from the 30% withholding, the foreign company must still deduct U.S. taxes from payments made to their performers. More information on this may be found on the Artists from Abroad website.

Stuff You Can Use: Board Ponderables and Resources

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There were a couple board related pieces I marked on the old Google reader I wanted to share.

First was an excerpt from a talk Gene Takagi of Non-Profit Law Blog recently gave for an American Bar Association seminar this month. The portion posted on the blog site deals with common governance problems boards engage in. The six points he makes deal with how boards misunderstand their role in the organization and the laws governing non-profit organizations.

Part of the third point caught my eye because it is a common practice but I have really never heard it discussed as a problem. (My bold emphasis.)

A lack of attention paid to the internal laws of the organization. Is the organization operating in furtherance of the exempt purpose stated in their governing documents? Do the directors really know, understand, and govern consistent with their bylaws and other governance policies? This problem often results when a board adopts bylaws that it copied from another organization without careful thought and consideration about how they work under different circumstances. It’s far too common for nonprofits to ignore membership requirements they’ve inadvertently created, elect a different number of directors than is authorized, and not maintain officer positions and/or committees required under the bylaws.

Not knowing where to start with bylaws, a lot of organizations use those of others as a template. I suspect that people choose to leave in elements that sound important and potentially useful when they really aren’t that important to the organization. I say this because a board I sit on tasked one of the vice presidents with a bylaws review and he essentially reported this very situation. The bylaws had originally been copied from a closely associated sister organization and there were portions that really did not apply to our activities. Advances in technology made other portions unnecessary.

To be fair, it is likely a group starting from scratch would include rules dealing with anticipated situations in their bylaws that proved to be extraneous. Time and experience is about the only thing that will reveal this to be the case which is why it is helpful to periodically review bylaws.

The other bit of information I wanted to draw attention to was a entry on The Nonprofiteer noting the availability of BoardSource videos on “the ten responsibilities of nonprofit Board members.” She also links back to her earlier entry on the Board Member’s Bill of Rights which bears reading.

Admittedly, the entry I link to is from February. I hadn’t the time to review the BoardSource videos until now. The video’s short, episodic structure make them faster to review than I thought. The way I see it though, many boards have likely taken a hiatus over the summer due to a lack of enough members to establish a quorum. This is probably an advantageous time for me to urge people to revisit the NonProfiteer’s entry to review the materials in preparation for an increase in board activity.

Stuff You Can Use: Tech Soup

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Ah, technology! Today I was sitting in my theatre attending a meeting. A few rows ahead of me was a woman who I was supposed to meet in my theatre after the meeting. About a half hour before the meeting was schedule to end, the woman texted her assistant asking her to call me and let me know she couldn’t make our meeting. I am not quite sure why she didn’t just get up and talk to me. The room was only 1/4 full so it wouldn’t be hard to find me. People were moving in and out to use the restrooms so there was no unstated prohibition against getting up during the meeting. But I suspect this is the sort of technology use I need to expect in coming years.

With that in mind, I wanted to point out a webinar Arts Presenters held in June about non-profits using technology. Arts Presenters had a representative of Tech Soup, Becky Wiegand, talk about non-profits using technology.

Tech Soup is a non-profit which, among other things, administers technology donations and reduced fee programs to non-profit organizations for companies like Microsoft and Adobe. If a company has conditions like only wanting materials to go to health services and after school programs for kids, Tech Soup distributes the products to people who qualify. Registration with Tech Soup gives you access to these programs and require you verify your tax status and purpose.

Once your organization is set up, you can go “shopping” for software. Their web interface apparently advises you if are eligible to receive the software or not. If you don’t qualify or don’t see something you would like, you can make a request for a donation.

Tech Soup also offers articles and webinar classes to help you discover how to use technology and what the potential value might be. So you can learn about low cost donor management software and what an effective use of Facebook might be for your organization. The site also has forums upon which you can ask other members things like their experiences using software you might have or be considering.

I strongly suggest investigating Tech Soup’s site to learn more. It is probably worth listening to the webinar. It is an hour long, but this particular piece actually has a video of the slideshow/web navigation that accompanies the talk. You can see where to look on the Tech Soup site to find various resources. Ms. Wiegand also mentions a lot of other technology resources that provide information, services and software either for free or more affordably than generally available and visits some of those sites as well.

Info You Can Use To Keep Your Employees

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If you aren’t already aware, part of the federal recovery package that applies to the arts provides funding to protect jobs threatened by the economic downturn.

What is really helpful is that you can apply for funding through the NEA, your regional arts organization (New England Foundation for the Arts, Mid Atlantic Arts Foundation, Southern Arts Federation, Western States Arts Federation) and your state arts council (each state may vary). I don’t see anything on the Arts Midwest or Mid-America Arts Alliance sites, but there isn’t anything on the Western States site either and I know they are distributing funds so it is worth an inquiry if you are served by those groups.

If you get awarded by more than one entity, you can only accept one. But the ability to submit to three different places does increase the opportunities for getting an award and choose among the best funding.

The regional and state arts groups have different criteria for awards within the umbrella of the NEA guidelines. If you are interested in applying, you better move quickly. Of those I have seen, the deadlines are end of May/first week of June.

Stuff You Can Use: Google Analytics

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Analyzing Effort Effectiveness
As a logical follow up to yesterdays post about how we have been communicating with our constituencies, I wanted to mention one way we are trying to track effectiveness. I recently started using Google Analytics to get a better sense of the traffic on our website. The service is free, probably because Google is already collecting the information and all you are doing is asking them to share what they collect from the pages you mark with your unique code.

I tested it out on my blog for a couple months before applying it to my web pages at work. As I noted, you have to add a short bit of code to each web page that you want it to track. Since the blog has fewer distinct pages on it, I felt it was a better use of effort to monitor the viability there. The data is much more organized and easier to read than when using programs like Awstats. Analytics also theoretically weeds out visits from search engine spiders and other automatic processes so the numbers you see are more likely to represent real people.

Sooo Much Information
The service provides some interesting information. You can see what pages people visited, how often they visited, how they got to your page (direct address, search engine, referred by another web page), how long they stayed, from where they were visiting and what search terms brought them to your site. You can also see how often someone from an IP address returned to your page and how many new visitors you had. The default setting is to show you the visits over a month’s time but you can expand that to a longer period or focus in on just one day. If you are interested, you can even learn what sort of operating systems, monitor settings, browsers and Flash versions your visitors are using. If a lot of people are using older computers, you may want to reconsider optimizing your web pages for viewing on monitors with higher resolutions. As I see from the report, there are a couple people viewing our web pages on iPhones.

I Think They Like Us!
One of the things I have discovered using Google Analytics on our work pages is that people seem to read and act on the emails we send out. The number of visitors to our web page shot up a great deal the day we sent out our last email and remained higher for a few days after. The visits to the event we profiled also increased as you might imagine, but we also saw a bump in visits to the pages for later events. We also saw an increase in ticket sales though that is a separate system from what Google tracks for us.

Who is Watching Me?
There is an option to create your own custom reports from the information provided. Despite all the information available, there are a couple weaknesses with the data you collect. With my blog I noticed that often when I visited from my home computer, my visits wouldn’t register. However, there did appear to be visits from the nearby Air Force base in the same number and duration of my visits. My theory is that because cable modems shift traffic around to nodes with less traffic, sometimes my visits registered as my neighborhood, sometimes I was apparently on an air force base. To bolster my theory, on January 12 both my blog and work website registered two hits from the Air Force base. When checked Network Location on my blog report, there were a bunch of links from the local internet server. The Network Location report on my work site shows “DoD Network Information Center.” So I am pretty sure the Air Force isn’t monitoring my blog on a daily basis. (Or at least they are doing a better job covering their tracks.)

But I Wanna Know More!
The other aspect I find lacking is that the report maker is limited. I don’t know if this is just because it is a beta feature and they haven’t enabled cross referencing for everything or because the limits help protect the anonymity of the data. What I would love to do is cross reference hits on certain pages to neighborhoods. The neighborhood data might not be entirely accurate but there would still be some value in knowing certain shows were attracting interest from certain general areas.

There are definitely entire swaths of the county that are under served and granters are interested in having us reach. Because these are people who are least likely to order in advance, it is difficult to use ticket sales records to prove an event designed to appeal to them actually did. If I was able to show there was a lot of activity on the show specific page of our website from these areas, it would lend some veracity to our claims. I am hoping this capability emerges at some point.

Even though the vast majority of the Network Locations register as large providers like Time Warner, Comcast and Verizon, there is enough specific information to give you a hint at the type of people viewing your pages. In addition to the aforementioned members of the Air Force, there are a couple hits from various universities, the city, the state department of education, health care providers and insurance companies on the theatre website.

On the whole, Google Analytics’ data is both feast and famine. You learn a lot more than you did without it, but in some cases you have no idea how the data might be pertinent to your needs and activities or you can’t process the data as presented in a manner that is meaningful. This is probably actually comforting to many of us since this means the sites we visit can’t easily figure out a lot of stuff about us either. (Though I am sure there are some smart people out there for whom this data is more than sufficient to establish identities.)

Still, if you acknowledge and accept the limitations, it can be illuminating and fun to explore. I have certainly only scraped the surface. We probably haven’t been using and playing with Analytics long enough to discover its full potential. I would really love to learn how other organizations have made the data work for them.

Information You Can Use- Grants and Foundations

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I don’t know if there is something in the air or just a lot of grant deadlines coming due but there were quite a few funding opportunities listed on the WESTAF website last week. I thought I would post on some of the opportunities that caught my eye. These aren’t all of them. WESTAF does good work and I don’t begrudge them their subscription fees which are pretty reasonable given the number of opportunities they list. Based on my assumption that everyone needs money and opportunities these days, it seems a moral imperative to post this information.

Google Grants
The first one is for free advertising for your non-profit from Google. It is similar to their Ad Words service though you don’t get as ready access to keywords and your ad has to be focused on your organization’s mission which is to be expected.

This is actually only one of the services they offer to non-profits. Check out the aptly named, Google for Non-profits for more information.

PennPAT
I have to say, I love PennPAT. They provide nice support for artists and organizations in the Mid-Atlantic States. I just wish I lived in the Mid-Atlantic states! However, no matter where you live, PennPAT will provide assistance with travel costs from anywhere in the US if you are traveling to see one of their artists perform. From the way I read the eligibility requirements, you could be living in Oregon and traveling to California to see one of their artists on tour. Or you could attend their annual showcase in Pennsylvania.

Wachovia Foundation
To receive support from these folks, you pretty much have to live in an area served by Wachovia Bank because they support non-profit organizations with which their employees volunteer. Focus is making artistic opportunities available to people with low to moderate incomes. If you think you are eligible, check out the details. At the very least, it is good to know the bank encourages their employees to volunteer with non-profits and then backs it up with some financial support. (Hey, I also don’t live in a Wachovia state!)

The Andy Warhol Foundation for the Visual Arts
As the foundation name suggests, they are primarily focused on contemporary visual arts. However, they do occasionally support performing artists “when the visual arts are an inherent element of a production.” The scope of what they support in visual arts is pretty broad and includes scholarship as well as exhibitions, catalogs and creation of new works. There is also an award for defending the First Amendment right of artists.

Bureau of Educational & Cultural Affairs
This one is actually a program of the U.S. State Department supporting “cultural exchanges around the world as part of the nation’s public diplomacy strategy. ‘The Department’s agreements support academic, cultural and professional exchange and training programs as a means of seeking mutual understanding between the people of the United States and the people of other countries and to promote the free exchange of information and ideas.'” If you want to be part of promoting international understanding, you may want to check out the website. I am actually not clear how performers position themselves to be considered since the project proposals apparently originate from what I assume are U.S. Embassies abroad.

The Dana Foundation
The Dana Foundation supports programs that provide professional development opportunities for arts specialists and professional artists who teach preK-12. They are looking for people who have created a curriculum for teaching the teachers essentially. Bad news is the are interested in supporting project originating in 50 mile radius around NYC, Los Angeles or Washington D.C. OR in rural areas. Not so good for those folks in Chicago and Dallas, et. al. but there are still a lot of people able to qualify from rural areas.

National Education Association (NEA) Foundation
The NEA you may not be as familiar with. These folks are also interested in supporting education, but don’t have a geographic limit. They also don’t have a subject area limit so you are potentially competing with everyone from every public school and public higher education institution. On the flip side, this provides possibilities for interdisciplinary and college prep projects.

The Multi-Arts Production (MAP) Fund
“A program of Creative Capital, supports original new work in all disciplines and traditions of the live performing arts. The goal of the MAP Fund is “to assist artists who are exploring and challenging the dynamics of live performance within our changing society, thus reflecting our culture’s innovation and growing diversity.” I haven’t applied for this but some groups with whom we closely partner have. It is a pretty competitive from what I hear.

National Endowment for the Arts (NEA)
The NEA we all know. Whether Barack Obama will be able to make good on his promises to have a robust arts policy while he is fighting to get the economy stimulated to the point it can be described as tepid remains to be seen. Still, seems like the time to stand up and advocate and apply for some funding.

Marketing Tip- Public Radio Fund Drives

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Everybody Wins

There is a helpful marketing tip of which I have been aware but neglected to mention. If you ever have the opportunity, it could be beneficial to appear on a fund drive for your local public radio station. The result can be a win-win situation for both you and the station. I have never been on, but will be this weekend. I have a few colleagues who speak well of the opportunity. I will admit as many times as other have talked about the value of the experience, I didn’t take the initiative to approach the station about the possibility, they called me in this instance. But if all goes, well perhaps I will be submitting proposals in the future.

If you can provide some sort of desirable item or service they can use as a premium reward for listener support and are willing to go on air to encourage people to pledge some support, you will also have the opportunity to talk about your organization. After all, the better your organization sounds, the more desirable the tickets/membership/sculpture reproduction you are offering appears, the higher the station can value the objects or services you provide today and in subsequent years.

All About Building Awareness

Even if the timing of the particular pledge drive falls during your off season so you are offering subscriptions to an unannounced season or to a very popular annual event whose details haven’t been finalized yet so you can’t talk about specifics, the mere act of increasing awareness of your organization is of value. My appearance on the show may not result in any ticket sales but at the very least it creates goodwill by showing we support a program listeners care about.

That is why I refer to this as a marketing opportunity rather than advertising. First of all, public radio stations have restrictions on calls to action in underwriting so there may be a restriction during fund drives as well. Second, this is a much greater opportunity to tell your story and position yourself in the community than is afforded during a 30 second advertising post. The value of the tickets versus being able to talk about my organization for a couple of minutes between songs over the course of 30-45 minutes is a pretty good trade off.

Different Preparation

Having an expanded opportunity to talk about your organization means a different type of preparation than goes into writing press releases and ad copy. As I said, I haven’t been on yet but it is clear to me that as with any public appearance by a organizational representative doing a little advance research and picking the correct person to represent you is crucial. Not only do they have to be conversational rather than woodenly reciting, “Yes, Bob, we have been presenting the finest in polka and klezmer at the corner of Oak and Main for 34 years,” they have to assist the fund drive by citing the value of public radio to the community.

Obviously, what your organization does has to mesh with the programming on the station to some degree. We don’t do a lot of classical music so I am not going to be appearing during any of the classical music shows. But that works out for me because I will be on during the show that is most closely aligned with the performances we do present. It should go without saying it is also good if you sincerely feel the station is a benefit to the community and can speak passionately on the subject rather than just looking to exploit the opportunity entirely for your organization’s gain.

I’ll be interested to see how things turn out and will certainly report on the results.

NB- It occurs to me that I was remiss in mentioning that in the absence of being able to actively chat about your organization on air, you and your staff could volunteer to staff the phones or provide other assistance. I have never not heard the station host praise the organizations assisting with the phones by name numerous times an hour. Again helps generate awareness and good will for your organization.

Actually, Now I Am Even More Confused

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Because copyright is a confusing issue, the folks over at the American Library Association have created this nifty little slider tool to help you determine if something is in the public domain or not. Frankly, at one time I thought there were some pretty simple rules of thumb you could use but now that I have seen this device, I am even more confused.

For instance, if you created a work before 1979 and published it before 2003, you might be protected. However, if during that time period, you happened to publish it between 1978 and March 1, 1989 and didn’t put a copyright notice on your work and never registered it, it is not protected and the work is in the public domain. Now given that I wrote a short story for school back in 1983 and did put a copyright notice on it, I think I am covered even though it was never registered or officially published. (Unless the photocopying of proud parents counts.)

Now I happened across an interesting situation. According to the chart, any work published before 1923 needs no permission and is in the public domain. Elmer Rice’s Adding Machine was first published in 1922 as noted here. While it was faithfully renewed, it should still be in the public domain. However, if you go over to the Samuel French website, they want $75 a performance for it.

So the question is, does Samuel French have the right to do so or not? The answer probably requires consulting experts. So despite the best intentions, this little device doesn’t really simplify matters at all and only serves to show us how little most of us really understand about copyright protection.

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Butts In The Seats by Joe Patti is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License.
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