State of Nonprofits

Economic data on major sectors of the economy are regularly collected and reported in the media and in industry-specific reports. For example, data about the real estate and financial markets are regularly published and available for use in decision-making by sector leaders, government officials, investors, and consumers.

Nonprofit sector leaders do not typically have the same access to timely, sector-specific information. In fact, data regarding the nonprofit sector is usually derived from the IRS Form 990 and, consequently, has a lag time of at least a year or more.

To address this lack of timely data, the Caster Center at the University of San Diego developed in 2011 the State of Nonprofits Quarterly Index (SoNP). Published quarterly, the SoNP reports on six distinct indicators that have a direct impact on the economic health of San Diego’s nonprofit sector: public confidence, individual giving, volunteering, demand for services, nonprofit employment, and overall unemployment.

In June 2014, the Caster Center released its 2nd SoNP annual report, presenting and analyzing findings from 11 quarters worth of data.

I have been privileged not only to work on the State of Nonprofits Index but also to report the findings for the Nonprofit Quarterly.  For more information or to read the report, please click on the links below.

International Volunteering

As you may know, I’ve had significant experience as an international volunteer. In some situations my presence was helpful to those with whom I worked. For example, the preschool I helped start in 2002 – 2004 in a rural town in the Dominican Republic has grown significantly over the years and, most importantly, is run entirely by Dominicans.

In other situations, my presence wasn’t as helpful. I remember volunteering in a favela in Rio de Janeiro in 2001, trying to learn Excel . . . in Portuguese. It was a painful experience for both me and the nonprofit. In fact, I probably learned more on the weekly bus rides to the nonprofit than the staff learned from me in all of the time I spent there.

Still, international volunteering can be a valuable experience, and it has grown in popularity over the years.

My latest Nonprofit Quarterly newswire offers food for thought to potential volunteers as they begin their journey.

Social Media Policies – NPQ Newswire

Members of the Turtle Creek Chorale, a thirty-four-year-old predominantly gay group with more than 200 performers, are using social media platforms like Facebook to voice their frustrations about the organization and its social media policies. The Chorale is not alone in its struggles to perfect a social media policy; many nonprofits are wondering how to write these short but complicated documents.

Social media policies are supposed to protect both the organization and the employees (or, in this case, dues-paying volunteers). When written well, social media policies provide the necessary balance of common sense rules (such as no profanity), organization specific protocol (don’t share confidential information), and overall guidance (be transparent). When written poorly, social media policies can lead to confusion and the perception—correct or incorrect—that individual rights are being curtailed. There are several websites which offer sample social media policies but few which provide accurate guidance as to what works and what does not.

Read the more about the case of the Turtle Creek Chorale and social media policies on the Nonprofit Quarterly website.

#Trends in #Online #Giving

The internet has changed the way we do many things. It has changed the way we shop, the way we bank, the way we teach. It has even changed philanthropy. eBay Deals and eBay Giving Works recently came out with an Infographic listing sixteen stories they believe prove the “internet has a heart.”  These stories do prove that online giving is alive and well. They also illustrate three potential trends or “hot spots” in online giving: disaster response, inspiring stories, and the few nonprofits savvy enough to channel the power of viral philanthropy.

Trend #1: Disaster Giving
Online giving is particularly effective in times of natural disaster. We saw this following the earthquake in Haiti. The Red Cross raised millions of dollars in a very short time frame using methods that are still largely untapped by many nonprofits: Twitter and mobile phones. The immediacy of disaster-based needs and the visual images of damages shown on TV are powerful motivators for philanthropy. The Infographic indicates that the eBay Giving Works program drive raised more than half a million dollars in support of relief for victims of the 2013 tornado in Oklahoma; and that GoFundMe has raised more than $3.3 million for victims of the bombing at the recent Boston Marathon.

Trend #2: Inspiring Stories
The internet loves a good story. You may have seen on Facebook or Twitter the compelling story of Billy Ray Harris, a homeless man from Kansas City who returned a diamond ring. That story went viral and more than $191,760 in donations poured in for Mr. Harris through GiveItForward.com. In a similarly touching story, a man from Nairobi inspired more than $80,000 in donations in less than twenty-four hours after being slashed in the face trying to defend his orphanage. These stories have the power to capture the hearts and open the pocketbooks of many.

Trend #3: Savvy Nonprofits
In other cases, it seems that nonprofits that are savvy about online giving can actively participate in creating the “perfect storm” for online giving. For example, more than $1.4 million was raised via Charity: Water when soon to be nine-year-old Rachel Bechwith asked that in lieu of gifts, friends and family helped bring clean drinking water to developing nations. Her wish was fulfilled after her passing. In another case, more than $200 thousand dollars was raised for Doctors Without Borders by a FirstGiving campaign sponsored by Reddit/Atheism. The Infographic does not tell the story of how the online campaigns were created or executed, but the focus on a nonprofit’s mission as opposed to an individual such as Mr. Harris is key.

Nonprofits should take note. Not all nonprofits work in the area of disaster relief but most can tell a compelling story. These stories, besides being potentially viral online giving opportunities, are touching and speak to our common humanity. They are a motivating factor in giving.

The money given to the man in Nairobi and to Mr. Harris will change a few individual lives but will not affect the lives of the many other homeless men nor will it improve the safety of other orphanages. However, nonprofits who educate themselves about online giving have the potential to channel the viral impact of these stories by raising money for the organizations and programs that will make a lasting change.

 

Note: part of this blog ran as a newswire report for the Nonprofit Quarterly.

Does Impact Investment Signal a Paradigm Shift?

There is a fundamental shift in how some are approaching business and philanthropy. Whether you call it impact investing, philanthrocapitalism, or social business, these emerging practices have the potential to be a paradigm shift in our economic landscape. Or do they?

Amy Bell, Executive Director and Head of Principal Investments for JPMorgan’s Social Finance business unit, writes that “impact investing is the deployment of capital with an expectation of financial return, where the success of the investment is also contingent upon achieving a stated social or environmental goal.”

Massive amounts of capital are being “deployed” as Bell describes it. JPMorgan Chase alone has allocated more than $50 million. Goldman Sachs invested $10 million for the US’s first social impact bond. The list goes on.

Is this just a continuation and expansion of corporate social responsibility or is this a deeper change? For decades (if not centuries) nonprofits have encouraged the corporate sector to give back. Nonprofits argue that corporations themselves are economically sustained in many ways because of nonprofits: low-wage workers access discounted healthcare at community clinics and pay reduced-rate tuition at their children’s preschool; higher paid workers are recruited with promises of an area’s operas, cultural life, private schools, and hospitals; and any employee can access a community’s religious services, clean beaches, summer camps, and more.

Eventually, corporations began to catch on and, in large numbers, began partnering with nonprofits through sponsorships, grants and, eventually, cause marketing. Corporations realized that cause marketing could increase sales, increase employee engagement, and could have a positive impact on the community as well. Well-crafted relationships between corporations and nonprofits can lead to very good things for all involved.

But impact investment seems to go a step further. By investing capital in projects through organizations – many of which are for-profit – that create social good and at the same time provide a financial return on investment, impact investing has the potential to fundamentally change the donor’s experience. It completely shakes our business vs. philanthropy mindset. Impact investing says, “We can do both at the same time.” And the underlying assumption is that if we can do both, we should.

But can we do both? In some cases yes. Bell offers the example of Wilmar Flowers. JPMorgan Chase has invested capital in this African-based business with the expectations that Wilmar will grow from purchasing from 3,000 to more than 5,000 African-based small farms, affecting more than 250,000 households. It’s not clear how this arrangement differs from a typical business loan except that, in this case, the business might have previously been considered too high risk. Given Africa’s shaky economic performance, investments like this could be a very positive move towards economic development.

Bell writes that at JPMorgan Chase, “We have increasingly sought to bring the full resources of the firm to bear on these issues over the last several years.” She later writes, “By marrying the expertise within our traditional banking businesses with the financial and philanthropic tools we have available, we are excited about the potential to increase our positive impact and to redefine how we all think about returns.”

There is a delicate balance between maximizing social good and maximizing profit. Imagine walking a tightrope with a barbell in your hand. If one side drops too low, the whole act could fall. If the profit weight is too heavy, the social good is compromised. If the social good weight is too heavy, the lack of financial return may scare future investors. Both goals must be held at equilibrium.

And in some case, we cannot and should not do both. In the wake of 9-11, hundreds of thousands of people were stranded on Manhattan Island. Fear and panic was everywhere. Local fishermen and those with boats self-organized to give people rides to the mainland. 500,000 civilians were rescued in less than nine hours. It was the largest sea evacuation in history. This voluntary organization was completely spontaneous. There was a tremendous return on investment for those who contributed their time and resources, but it was not a financial return.

Is impact investing an emerging paradigm shift? Probably. In fact, there may come a time when the public expects all businesses to operate with a social mission. That day may come sooner rather than later. But the 9-11 boat lift teaches us that the opposite is not necessarily true. Not all social missions can offer financial ROI.

Nonprofit or For-profit? – NPQ Newswire

I’m intrigued by the social enterprise movement, if we dare call it that. In my recent Nonprofit Quarterly Newswire I look at the choice one social entrepreneur had to make.

As ThinkImpact grew, its founder, Saul Garlick, had to make a tough decision: remain a nonprofit, or change to a for-profit model? To do so, he had to consider some key elements: ownership, transparency, and profits.

Read my Nonprofit Quarterly Newswire by clicking here.

Unpaid Interns May Be Too Expensive – NPQ Newswire

Summer interns: We love them and we hate them. But do we have to pay them? That is a question much debated. Most recently, that debate has been taken up by a federal judge in Manhattan, who ruled in June that Fox Searchlight had broken minimum wage laws using unpaid interns on the set of Black Swan. This ruling, which may or may not be overturned upon appeal, signals that the legal and financial risk of unpaid interns may be greater than previously considered.

Read my newswire to discover why: http://www.nonprofitquarterly.org/policysocial-context/22569-unpaid-interns-may-be-too-expensive.html