Nonprofit Harvest

Dashboards

A few weeks ago, Blue Avocado published a great post about the value of Dashboard reports:

Imagine getting a dashboard like this at every board meeting. With a glance, board members could see how the organization is doing and start asking the important questions. The board would also be able to discuss what indicators should be added to the dashboard and which might not be necessary…

It’s hard to imagine driving a car without quick, ongoing access to a speedometer, fuel gauge, or gear position. An organizational Dashboard can be the same, fast way to check in on basics . . . so you can pay more attention to where you’re going.

It was a timely article, because we had just revamped our own dashboards.  We wanted to make sure we were giving the board and staff the most useful metrics about our finances, programs, and other work.  The end result is more useful dashboard for board and staff, but just was useful was a by-product of the process.  It forced all of us to take a step back and consider what information we’re sharing and why.

As the Blue Avocado article states, it doesn’t tell us where we’re going, but it provides critical information that allows us to focus on our work and the road ahead.  A tool that helps you cut through the noise and focus is a great asset.

For more on dashboards, read What Gauges Belong on Your Dashboard? or Seth Godin’s post, Dashboards.

Overhead

There is an interesting debate swirling about nonprofit overhead expenses.  Are they an investment in infrastructure,  money that could be better spent on programs, or something in between? Do donors care?  Should they?  This is Kate’s take:

Here’s my soapbox

I agree that it’s wise to “Do the same due diligence on your donations that you would your investments or your business.” But when I review an investment opportunity, I review based on the expected criteria for a successful business – profitability, market share, and returns. I don’t review their overhead and management costs. So why would overhead be the criteria for a charity?

…Do some due diligence on charities before you donate, just as you would for an investment or business opportunity. Pay especially close attention to how successful the nonprofit has been at achieving its mission. Do they provide information about how effective their programs are and what impact they have on the people and communities that they serve? Do they have a way to measure and communicate progress and/or success?

Join the conversation at Balancing the Mission Checkbook, facebook, or follow the example of Rich Cowles from Charities Review Council and blog about your position.

Late July Harvest

Mergers

• Joining Forces in the Back Office – Lodestar Foundation Resources
• Nonprofit mergers: Putting the best foot forward

IRS Updates

• IRS Releases Final Regulations for Returns of Small Groups
• IRS Training Materials – Governance

Other Resources

• Workshop Resources, Questions and Answers
• Nonprofit Leadership 601: New to Running a Nonprofit: Here’s an Overabundance of Resources
• Turning Crisis Into Opportunity: A Conversation With Two Nonprofit Sector Leaders

Crowdsourcing: What’s Working, What’s Not

A few weeks ago, Kate issued a call for “stories of change and transformation” and in the comments we talked a little bit about how we could leverage the power of our online community and crowd source this. I’ve had a few conversations about tools and tags, but before we jump into tactics, I wanted to ask:

• Is this happening elsewhere?
• Is anyone interested is collaborating on this kind of project?

Let me know in the comments.

Minnesota’s Current Conditions

On the heels of last week’s post on the Giving USA annual study, we have more data to digest. MCN recently released their Current Conditions Report for June 2009:

Minnesota’s nonprofits continue to be seriously affected by the recession. Nonprofits are bracing for extended impacts from the reduction in revenue they have already seen and expect to continue to see in the coming months and years.

• Organizations relying on state, local or federal government are seeing varying levels of unreliability in payments to them from government, making it increasingly difficult for organizations to plan accordingly. Exacerbating this is the threat of unallotment for many organizations.
• A majority of organizations report an increase in demand for services, yet many are still having to cut back on staff.
• All major nonprofit revenue sources (contributions, government funding, foundation grants, and earned income) are reported to be down from economic affects.
• Small organizations are feeling the worst affects, with far more reporting declines in revenue and cash shortfalls. Small organizations are also the least likely to have available reserves or a line of credit to fall back on.

These findings are echoed by other studies (here and here).  Although the specifics vary from state to state, and among organization type and size, people in our sector are doing their best to meet demands with fewer resources.

We are all trying to prudently cut costs in ways that minimize the impact on our mission and overall capacity. This is a tall order, especially when combined with increasing needs for service. How do you go about making those tough choices?

A Four Step Framework

Our executive director, Kate Barr and Judy Alnes of MAP for Nonprofits wrote an article for MCF’s Winter Giving Forum, Nonprofit Survival: Four Steps to Take Now:

Economic uncertainty and the threat of impending doom are not unfamiliar territory for nonprofit organizations. We’ve lived through multiple downturns and have “right-sized” ourselves time and time again. Philanthropic organizations have done likewise.

But something feels uncharted about this downturn. Perhaps it’s the fact that it has fallen on the heels of a downturn from which we never really recovered. Perhaps the global nature of the economic stress makes us see ourselves in a broader context. In any event, this fire is real and hot.

Then they lay out four steps to help you make decisions:

• Focus
• Identify Your Most Important Work
• Seek and Speak Financial Truth
• Review Size, Scope and Structure

Read the rest of the article for more information on this helpful framework.

Other Resources

• Improving Cash Flow Management In Challenging Times: A Primer from Nonprofit Quarterly
• Our Cash Flow Template and Nonprofit Scenario Planning Tools
• Nonprofit Layoffs and Furloughs: Do Them Right from Blue Avocado

More resources are available at Sustenance in Lean Times, our resource collection.

This Week’s Harvest

• Governor’s Unallotment Plan
• Check out the Nonprofit Quarterly’s Daily Digest – the Nonprofit Newswire
• Strategies for Hard Times: The Case for Sustainable Funding
• Charities Review Council unveiled a draft of their updated Accountability Standards
• Recession Resources for Artists and Arts Organizations

Serve America Act

National Volunteer Week honors the important work of volunteers in our communities.  It seems fitting that President Obama signed the Serve America Act during this time.

In addition to encouraging service, the legislation includes capacity building resources specifically designed for small to mid-sized organizations. For more information, read Kate’s thoughts or learn more about the Serve America Act.

Volunteer Management Resources

We know that volunteers provide a great boost to nonprofits, but they also require specific management resources.  Here are some tools to help nonprofits get the most value out of their volunteers:

• Tracking Volunteer Time to Boost Your Bottom Line: A Complete Accounting Guide from Blue Avocado
• Value of Volunteer Time from Independent Sector

Nonprofit Accounting

Speaking of accounting systems, Alan at Not-For-Profit Accounting makes an excellent case for their importance:

We go into the sector because we care about the mission, making a difference, building community, or any other number of reasons.  Not so we can crunch numbers.

But some people are shocked when they realize just how much regulation, filing and paperwork comes with a tax exempt status…The more time it takes to hammer those reports together, the less time you have to do other things like mission and fundraising work.  The harder it is to compile good financial information, the greater the likelihood of it not being as accurate as it should be.  As has been stated more than a few times,  you can’t figure out what you are going to do financially if you don’t know where you stand right now.  Good cash flow planning and budgeting can only be done if you have a system in place that can get you usable information in a timely fashion.

His post, Why You Need an Accounting System also provides resources to help you get you started.  For more ideas on what questions to ask if you need to develop your own system, read Help! We need an accounting system!

This Week’s Harvest

• Two-Thirds of Foundations to Reduce Grantmaking in 2009 from PhilanTopic
• Helping Themselves from the Wall Street
• The Recession Brings Tough Challenges and Opportunities, Say Experts on Socially Run Businesses

If you are looking for volunteer opportunities in the Twin Cities metro area, I suggest visiting HandsOn Twin Cities or MAP for Nonprofits.

Are You Concerned About Cash?

Blue Avocado’s new issue includes the financial management article, Finance Fear Factor Ratios.  Unfortunately, a number of people can probably relate to this experience:

A CFO at a troubled organization told me, “The first and last thing I do in the morning and evening is look at our bank balance and see if we have enough cash to meet our next payroll. The budget looks fine, but cash flow is our biggest problem.”

How do you know whether or not you should worry?  Read the rest of the article for ratios and four key questions to help you recognize red flags.

You can also read Cash is Cash, Sometimes for information on what could impact your ability to access your organization’s cash.  And our handy Cash Flow Template is available to help you craft your own cash flow projections.

Calling All Minnesota Social Entrepreneurs

Don’t miss your opportunity to enter the Social Entrepreneurs Cup – a joint venture of Social Venture Partners Minnesota and the Minnesota Cup.  This competition “seeks out, supports, and celebrates Minnesota’s most innovative and effective social entrepreneurs and the nonprofit organizations they lead.”

The deadline is Friday, April 24th, so you have one more week to enter.  It’s an opportunity to win a $20,000 general operating grant and 40 hours of consulting from Social Ventures Partners.

In the News: This Week’s Harvest

• The Pohlad Family Foundation announced $20 million in grant support to businesses and nonprofits.  (Our loan fund is generously supported by the Pohlad Family Foundation.  Our complete list of funders is available here.)

• USA Today launched a new feature specifically for the nonprofit and philanthropic community.  Check out the Sharing section for news on our sector.

• The Foundation Center-Cleveland’s online librarian, Katie Artzner, live-blogged a recent conference session, Navigating Your Nonprofit Through Challenging Times.

• Updates from the Social Enterprise Summit (via the Chronicle of Philanthropy):
  • Nearly Half of Charities Operate Businesses
  • New Legal Status for Socially Oriented Business Gains Ground

• White House Appoints Head of Social Innovation Office

We’re very excited that our executive director, the “wildly practical Kate Barr,” is featured in this month’s Nonprofit Quarterly.  Her article, Improving Nonprofit Decision Making amid Economic Crisis, highlights the importance of taking action:

Over the next year or two, budgetary challenges are clearly in the cards, and there are likely to be successive and different situations requiring action. Change may be inevitable, but the impact of this change on an organization depends on which decisions are made and how.

Although Kate doesn’t use the old adage “Never put off until tomorrow what you can do today,” she does illustrate the dangers of allowing a problem to “fester until it [becomes] a crisis.” She also offers some suggestions for how to improve organizational decision making.

After reading the article, you can use our resources to start making decisions at your organization.

• Cash Flow Template
• Scenario Planning Worksheet

This Week’s Harvest: Frequently Asked Questions

Audits

Not-For-Profit Accounting returns to answer some frequently asked questions, starting with questions on audits:

Our nonprofit is getting ready for our first audit.  What are we supposed to do, and what does the auditor do?

You should receive a letter of engagement from the auditors that helps spell out the relationship.  You’ll also get a lists of things to do and get ready before the auditors come to your offices for the field work.  This article also talks about the process.  But if you have any questions you should ask your auditors before things get going to avoid any confusion and additional cost.

Read more about audits in Balancing the Mission Checkbook and see what other FAQ’s Allan tackles in blog post.

Collaboration

• Mergers seem to be the hot topic these days. But there are many ways to collaborate beyond mergers. The Foundation Center provides information on different types of strategic alliances, including few different typologies, which underscores the range of possible collaborations.

Stimulus

• 2009 Recovery Act Resources for Nonprofits from MCN’s Public Policy team

• Want Stimulus Money? Act Fast! from Fieldstone Alliance

• Special Reports on Economic Stimulus & Recovery from the National Council of Nonprofits

Alan at Not-For-Profit Accounting sees a silver lining in the recession – a greater focus on nonprofit operations:

I have read more articles about not-for-profit operations, administration and finance recently than I think I have in the last ten years. And they have been positive. They have spoken of the need for organizations to look at how their finances and operations are handled, to make sure they have the systems in place to be able to figure a) out exactly where they stand financially and b) what to do going forward as far as budgeting, cash flow and capacity.

While I’m not happy about the pain that will be felt by many organizations and the populations they serve I am pleased that these discussions are taking place and that we will end up with a stronger sector once this crisis passes.

Check out his post,  Money Managing in Challenging Times, for a collection of tools and resources to help your organization.

HR Resources

COBRA Updates

• Health Insurance: A Bit of Good COBRA News (Blue Avocado)
• COBRA Premium Reduction in the Recovery Act (MCN)

Ask Rita

A regular Blue Avocado feature is Ask Rita in HR:

Rita in HR is actually two HR attorneys in one: Ellen Aldridge and Pamela Fyfe, both of the Nonprofits Insurance Alliance Group. They advise nonprofits on wrongful termination, wage & hour, discrimination, harassment, and other employment issues.

Recent topics include: 

• Downsizing from Employees to Independent Contractors?
• Nonprofit Layoffs and Furloughs: Do Them Right
• A Family and Medical Leave Act Checklist