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The NonProfiteer

You Don’t Tell Me What To Give, Don’t Tell Me What To Say

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An interesting question was posed to Kelly Kleiman, the Nonprofiteer, about the practice of suggesting donors increase their giving from the previous year. The writer was offended at being told what to give the next year. Kleiman attributes the origins of the practice to universities who, anticipating the increased fortunes of their graduates as the moved along in their careers, asked for slightly greater amounts as the years progressed.

This seems like a great thing and, in fact, is the reason individual giving is such an important source of funds to organizations: while foundations often won’t continue their support unless you do something new and different for every grant, most individuals will just keep on giving unless you affirmatively offend them.

But what you’re saying is that the request for elevated support is just such an affirmative offense.

The problem is that the cost of everything continues to go up, and unless the monetary inflow goes up at the same time the agencies you support will find themselves seriously behind the 8-ball. Perhaps the agencies requesting your increased support would do better if they reminded you of that—”We haven’t been able to give our actors a raise for five years while their rents and grocery bills just keep on rising”—rather than beginning with a flat-out demand that you do more.

I thought the question and answer gave some interesting insight into the whole practice of “upselling” donors from year to year as well providing some guidance about how make the request a little more graciously.

What made me cringe was the second part of the writer’s question/complaint.

“And this year, when, as a board member, I was given the fundraising “ask” letters that were going out under my name to my personal contacts, I felt especially irritated to see the request for a specific additional amount. I would certainly never have written my friends directly with this request.”

Kleiman responds that the writer is within their rights to feel upset that such a request was going out under their name. It put me in mind of a piece from the Non-Profit Quarterly I wrote on this summer. The author, Simone Joyaux, referred to the practice of having board members solicit donations from family and friends ,as trespassing. She claims it leverages personal relationships rather than an interest in a cause and ends up alienating both the board member and their friends.

Joyaux noted that giving based on trespassing is generally shallow and not likely to persist after the board member has transitioned away from the organization. Unless, of course, the person solicited is genuinely interested in the organization’s cause. In which case it is better to have conversations and identify that interest initially rather than blindly solicit everyone in a board member’s address book.

This post title inspired by Lesley Gore

[youtube http://www.youtube.com/watch?v=zaw1ibwVbPI&w=640&h=360]

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.”

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.

You Know, For The Kids (And Everyone Else, Too)

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February was a real busy month for me so I only had the time to bookmark The Nonprofiteer’s epiphany about the value of public funding for the arts.

“Of course you’re indifferent to public funding for the arts, you dodo; you live in Chicago, where major performers and exhibitions will show up anyway. Public funding for the arts isn’t for Chicago–it’s for Bloomington.

And she remembered growing up in Baltimore, which is not a small town but which waited for months between visits of major dance companies; and she remembered the thrill of seeing those dance companies for the first time. And she realized (0r remembered) that that’s the real point of public funding for the arts: to make available to everyone the thrill of exposure to first-rate art. Everyone: that means people who live in Bloomington, and International Falls, and Arroyo Hondo, even though the free market would not support a stop in any of those places by the latest tour from the Joffrey or the Royal Shakespeare Company or the Met.

I thought she made quite a few good arguments on behalf of funding the arts. They seem of particular value given that she finds them compelling as a person who is not particularly supportive of public funding for the arts. It isn’t often that a non-politician who has not drank deeply of the Kool-Aid takes the time to provide considered commentary on behalf of public support of the arts so it behooves us to take note. As might be expected, I am not entirely in accord with her suggestion that support should only be in presentation rather than creation of new works. Though I certainly do see her point:

“…you have to accept another, equally painful truth, which is that no one can actually determine what’s “art” til at least 25 years after it’s been created. Probably the Nonprofiteer doesn’t need to remind you that people threw things at the stage the first time they saw and heard The Rite of Spring, now part of the musical canon. But what she probably does need to point out is that this doesn’t mean the public should accept and/or fund every objectionable thing it sees in hopes that it will ultimately turn out to be art. Rather, it means that support for creation is a mug’s game, a gamble at which most players lose, and that the public should instead put its money into presentation.”

I hadn’t initially assumed she was saying that public funding of the arts was needed to bring culture to the hinterlands. All the same, I was glad for Scott Walters’ comment to her about the importance of enabling local groups to develop works that emphasize and reinforce the value that can be found in their communities. For me that is the strongest argument for funding the creation of new work. I am not as vocal as Walters is on his blog about how the concept that artistic success originates from NY/LA/Chicago is robbing the rest of the country of talent. But I am certainly in agreement with him that there is no reason those places should be held as a standard of quality and be viewed as the only destinations for achieving artistic success.

Public monies and tax breaks are offered to attract and retain industry, perhaps the same should be done with the arts. The argument can be made that state and municipal support of the arts is doing just that. What the public support is not doing though is generally providing incentive to “buy locally.” In some cases, there has to be an equal investment in encouraging people to create locally as well. I have mentioned in a number of posts lately that while it would be much more economical for me to present local artists, there aren’t enough of quality to sustain the effort very long. There are a fair number of talented people in the community, but most (though certainly not all) are expressing themselves via Broadway plays and musicals or covers/derivatives of other people’s work.

Still, if the criteria for receiving public monies and tax breaks was 100% of the concept and execution by local artists, I could take advantage of the support at least once a year and guarantee my audiences the quality they have come to expect. That sort of confidence constitutes a good starting point in my mind.

One last bit of the NonProfiteer I would quote is her view that we need to get public support for the arts as acceptable a concept as public support for education.

Yes, yes, the Nonprofiteer knows: education isn’t well-funded either; but relatively few people argue that public funding for education is just a plot to spread disgusting lies, or to keep teachers from having to work. Let’s get the discussion about public funding for the arts to the level of conceptual agreement we have for public education, and then we can engage in any further battles that might need to be fought.

In other words, brethren in the arts community: stop talking about public funding for the arts as if the point were for the public to support YOU. No one cares about you. What we care about as a society is US, and how exposure to what you do will improve us.

I think there is a distinction between what she means by “how exposure to what you do will improve us” and the message the arts have been communicating along those lines. While improving test scores, reasoning skills and developing geniuses in the womb are probably part of what she is suggesting we talk about, it can’t be the entirety for the simple reason that it excludes anyone who is not a child. People care about their kids, yes, but everyone will only be persuaded when they perceive they are included in the benefits. I think it is pretty clear that the reasons we give can’t be about what we want people to experience but what they want to experience.

We want people to experience transcendent moments and there is a good chance the first time they sit down to hear a symphony play, they won’t have a transcendent experience. The measure of their satisfaction with the experience that night may simply be that no one caught on to their utter cluelessness. Transcendent experiences should certainly always be a goal and are absolutely attainable on ones first interaction. I just spoke to a woman today who had a group of students who did just that, though they probably couldn’t have identified it as such.

There is a difficulty in asking people what they want out of an experience with which they have had limited interaction. About 18 months ago I linked to a video of Malcolm Gladwell talking about how when people were asked what kind of spaghetti sauce they liked, described the sauces they were eating. However, when presented with samples of different options, expressed strong preferences for sauces that no company actually made. When asked, people may say they like car chases and gun battles not realizing what they really may value is dramatic tension and once they get past the arcane language, a lot of Shakespeare really suits them.

If trying to draw responses of value from your audiences sounds like an intimidating process, well sure it is. There are big companies sinking millions of dollars into marketing and research trying to figure it all out too with limited success. The advantage you have is that you only have to figure it out for the community you serve.

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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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