Demonstrating Donor Due Diligence

As a major donor to a large nonprofit charity or foundation, what due diligence do you perform to ensure the board leadership is making unbiased decisions as disinterested board members? If your answer is none, you are making poor investment judgments. Just as you would examine an investment prospectus, you should perform similar due diligence ensuring the board director's decisions are being made "at arm’s length." 

Especially during an executive search, directors may make decisions based upon their personal bias or connections, not solely on the ability and experience of the candidate who will best bring sustainability and move the organization forward.

As an "investor" in a nonprofit or foundation, ask for search committee and board minutes to examine their hiring policies, process and judgment. If the search committee is limited to too few members, lacks transparency, fails to include major donors, or other directors are told not to refer candidates, I would question the board’s process and lack of policy and transparency. If the evidence indicates any of these issues, at the least I would address these issues with the board - at the most I would immediately remove my investments.

As representatives of the public, 501(c)(3) corporation directors are ethically and morally bound to leave self-interest at the door, seeking only the interest of the organization, donors and those receiving public benefit. Your investments and your community deserve no less.

Online Assessment Tools for Identifying Organizational Issues

Nonprofit Leader,

As an Executive Director I often wanted to know how well my board and staff understood our organization’s mission and vision, and if they were being clarified well enough.  I needed to assess the awareness of my board of how critical their understanding our programs and networking was to the organization and to our position in the community.  

Each time I looked over an organization’s financials and fundraising, I found areas needing improving, and fundraising issues that the staff and board had not recognized had changed over time.  It was that process of discovery and analysis that helped me revitalize several stagnant nonprofits and help them thrive. 

It was the fresh perspective of an outsider that made the difference.  In many cases a consultant is hired to show an organization’s leaders what they have been missing and help them make the right changes.  Some of the leadership and/or staff may recognize the issues, but may not be able to be the agents for the needed change.  Thus, the third-party consultant is engaged.  But how do small, struggling under-funded nonprofits afford the rates for an experienced consultant?  They can’t, and so they keep struggling through tough organizational issues, ineffective programs, staff turnover, disconnect with the community, and loss of funding as a result.  And what are the options for well-run organizations to take an occasional fresh look at their organizational dynamics and leadership?

It was recognizing these issues that led me to create several online assessment tools that provide the data nonprofits need to get the overall view of their organization and start recognizing the needed changes to make.  By limiting travel and time of on-site interviews we reduce the cost and still provide a needed summary analysis to help an organization: 1. understand the stage in their life-cycle, 2. examine Staff-CEO-Board relationships, 3. measure their fundraising effectiveness.  

By developing anonymous surveys administered online, I have been able to assist a number of organizations of various age, size and budget.  The survey results are graphed for ease of understanding, and a brief, interpretive assessment is provided of potential action steps for further considerations.  The next steps are up to your organization’s leadership and funding capabilities.  You may decide to engage me or other advisor to help you move forward.  In any case, you will have this very important data with which to help change your organization for the better.

I invite you to take a few moments to examine my website and my background, and the four levels of low-cost assessment analysis tools I offer at jklewis54.wixsite.com/charisnp.  Whether you decide to engage my services beyond the surveys is completely up to you.  I am available to you to discuss how these can help your organization and help you lead quality change.

 

Serving together,

James K. Lewis, m.a., ccnl, cfre^®

Assessing Proper Board Oversight Limits Culpability

This article by Eugene Fram, author of "Policy vs. Paper Clips" is a good overview of critical board roles in providing due diligence. Too many nonprofit boards don’t realize their culpability for CEO performance. Appropriate oversight will provide for proper monitoring and fully understanding organizational issues.

The board must recognize their responsibility as an independent arbiter of facts, without prejudice. It may be that the board's monitoring of the CEO is minimal or non-existent, which puts a level of onus on the board for an escalating issue. Sitting down with the CEO to gain insight and discover what support he or she needs should be the first step when any issue is brought to the board's attention.

Your board and your community (which you represent) are too deeply invested to allow for a lack of proper oversight sidelining your CEO – and potentially your organization’s mission and vision. Remember, your role with the CEO is a partnership!

As a nonprofit consultant, I'm particularly cognizant of the issues raised by this article. I've heard that among the membership of just one national nonprofit association, in the last year there have been about 12 member organizations that have gone through tumultuous leadership shifts, with this being the primary issue.

While the board must step in when appropriate, there must be policy and procedure in place that is closely followed. Only when serious ethical or fiduciary malfeasance is found should a board step in directly.

Developing, protecting, and reconciling the relationship with their sole employee, the CEO, is their primary job.

In light of these concerns, one of the first assessments I recommend is a board survey to highlight any governance and policy issues or disconnect with the CEO. In a majority of my cases so far there have been indicators of a need for board/CEO training in monitoring and policy creation. Every effort at deepening the relationship and trust with your CEO will pay dividends.

When do you need a consultant?

 

Numerous issues in a nonprofit organization rise to the occasion of requiring paid outside assistance. These involve acknowledging you’re facing something larger than your in-house skill set can handle alone. Accepting that help is needed is the first step in any weakness or dysfunctional behavior – whether of a person or an organization.

Sometimes a struggling organization just needs help transitioning to its next stage of growth. Perhaps a well established organization needs help re-inventing itself. Facing reality is the most difficult when leaders and staff are deeply ingrained in the present organizational culture. It becomes even harder if the leader is a founder or long-term CEO, where he or she may be sensing a loss of control or that recent changes are becoming overwhelming. A lack of positive organizational dynamics keeps many dysfunctions hidden, and people are unwilling to be the one vulnerable enough to upset the apple cart.

Consulting with outside professionals isn’t limited to the need of addressing serious issues . . . most leaders could use regular coaching with peers and/or professional consultants. But some circumstances call for more serious consideration for outside help:

Strategic Planning. This process can require an anonymity that an independent consultant allows. Often I’ve found a key staff or board member who admits to not being sure of the direction or even of the organization’s mission and vision. In one case it was found that a new board member wasn’t aware of the organization’s religious core principles of faith. Appropriately laying the foundation before discussing strategy is critical to success. 

Analyzing fundraising effectiveness. In such a volatile economic landscape, it can become comfortable for an organization to stay the course with tired or limited funding appeals and stale communications. Organizations tend to stay with old metrics and “shot-gunning” rather than using new tools to target a segment of their donor base who are more likely to respond to different types of communications. E-commerce is still only effective in a small portion of demographics, and it is key to understand when and how to phase that in.

Closely aligned with fundraising is an understanding of an organization’s publics – those who can control or limit an organization’s ability to flourish. Many times an organization has “blinders” and they are not aware that they’ve grown myopic in their programs and vision. I’ve seen organizations atrophy due to ignoring the reality of their external context and relationships. This is where familiarity breeds contempt; stakeholders who once supported and helped form the organization can, if ignored or taken for granted, become the worse critics.

A most serious issue that desperately demands immediate assistance is internal organizational conflict due to a lack of unity in mission and vision. It's critical to quickly re-establish clarity of mission and unity between the leaders and the staff or board. This requires outside intervention. But choose the consultant carefully, as this requires a professional who is able to decipher the organization’s deeper cultural and personal issues – not merely personnel or HR issues that are on the surface. The former is ripe with personality clashes and broken trust, while the latter involves organization policy and procedure – which may need addressing, but is not the root cause.

I will mention briefly the need for a consultant and/or interim management through a period of crisis leadership change. Addressing this will require a separate blog, but it's most critical to contract with outside assistance rather than use internal staff in such a case.

These are just a few areas of concern where an independent third party will be able to increase awareness, broker unity, and ensure the stability and sustaining of the organization’s mission. Don’t wait until you realize the need – develop relationships with those you trust and who will be ready and willing to intercede within your organization when needed. While these resources may be costly, you will save time and money with the judicious use of consultants. They will be worth it to the organization, as you will gain much more than you spend. They may be reported as an expense, but they are an asset to any organization.

For more information on choosing Consultants:

http://strengtheningnonprofits.org/resources/guidebooks/Working_with_Consultants.pdf

http://www.first5la.org/files/Nonprofit%20Consultants-How%20to_Buttenheim.pdf

http://charisnp.com/
http://www.artiosinstitute.com/

http://www.theedgegroup.org/

Mailbox Missionaries

Overhearing a conversation between my wife and me about bills and our limited funds, our 9 year-old daughter piped up, “Maybe there will be a check in the mail today for $200!”

In 1989, after being accepted as approved missionary candidates with Wycliffe Bible Translators, it was recommended that I get further training in avionics and acquire my FAA General Airframe Mechanic certification in order to better serve in Communications – my technical support missionary position would require installation of radio equipment and antennas on aircraft. Having recently left my position with Eastman Kodak as a Field Engineer – and its relatively secure salary and benefits – our family of 6 was residing in East Tennessee while I attended Moody Aviation.

But while we were only approved candidates, we could not raise financial support through Wycliffe until this course was completed and we were ready to continue our Wycliffe training. So, we had written our friends, explaining to them our quest toward missionary service, and left it to the leading of the Lord through them for our personal support . . . we were now “Mailbox Missionaries.” 

Later that day the mail was opened and there was, indeed, a check for $200; the faith of a little girl and her family was fulfilled and strengthened. Through these vignettes of God working through His people, we were able to trust that our support would be realized and His work would go on as an extension of those who supported and prayed for us.

Such is the plight of para-church ministries and nonprofit charities that do not receive government funding, but rely primarily upon the generosity of donors in order to provide critical relief and services to the remote, disadvantaged, victimized, homeless, poor and needy. This work is only possible through the partnership of others who sense the call to reach out and fulfill the command of God to treat these people as we would the Lord Himself.

Many bemoan the numerous pieces of mail that tend to flood our mailboxes. But I realize that educating the public on services ministries provide and the opportunity for changed lives is often the only way the average person will know of that work. Many times I’ve heard donors make the comment, “I didn’t realize you did all this”; and this from those who have been supporting the organization for years!

Public concern for the percentage of donated funds used for solicitation is warranted. Interested donors can check out charities on websites such as Guidestar.org and review nonprofits’ 990 reports. If a 990 is not available, it is often an indication that the charity is reportedly operating as a church, and therefore not required to file a 990. Donors should carefully consider religious charities transparency in reporting information such as program, administration, and fundraising ratios as good stewardship of their giving.

However, the mechanics of fundraising and accountability should not be allowed to overshadow the ministry accomplished by small charities that exist primarily as “Mailbox Missionaries.” The response envelopes that come in the mail each day are the lifeblood of critical services and can often limit the ability to sustain ministry. When you consider supporting a ministry beyond your normal church tithe, consider if that organization is utilizing every inch of its facilities, every donated penny, and every offered prayer for the service of others and to the glory of God.

And the next time you see that envelop in your mailbox, remember a little girl and a young missionary family whose faith was answered through someone responding to a need. The possibilities that your support provides toward the faith of the organization and those individuals and families that benefit are endless. Your investment is an extension of the church’s responsibility to reach out to a needy world – and often, it is through a response to a piece of mail. 

"We CAN do what we do without you, However . . ."

As a ministry leader and fundraiser I have to confess that I have disliked the phrase from the first time I heard it . . .“We can't do what we do without you.” The misguided mantra we use in an effort to convince our donors and volunteers how valuable they are to the ministry.

After over a decade of feeling this way, my perspective was finally confirmed by my good friend Doug Shaw in his recently released book, “The Rules of Fundraising.” Doug’s Rule #9 states: You don't have to lie to raise money [or get people to volunteer].¹  This admonition is included with a few of the “little white lies” we advance, along with overstating the impact of our organization.  

Now don’t get me wrong – what ministry partners do and give is no less than critical to a successful and effective ministry. But to make such an overstatement robs the glory from the true origin of all our available resources and abilities to serve people in need . . . that of our heavenly Provider.

God is the true owner and provider of all that we have – and all that the donor and volunteer share with us. Those who share are merely His chosen stewards of what is His. I actually verbalized this a few times when thanking those who served my ministry by saying that while we could still do most our work without their involvement, their participation made it so much more meaningful and less challenging . . . and our success wouldn't be such a blessing if we weren't sharing it with them. I wondered though, if that resonated as much.

If what I feel is right, in what way can we make our gratitude known to those who invest their time, treasure, and talents in the ministry? We can appreciate them and their investment by acknowledging that they empower us to serve in a manner that is enhanced and more effective – and which pleases our Lord. I feel the more important idea to convey is the vital impact our partners bring to the table through their efforts.

Their involvement has a direct bearing on the breadth and depth of the ministry to, and the life-change produced in, those we serve. That impact is the mantra we should voice – and not understate.

¹ Douglas K. Shaw, The Rules of Fundraising, Naperville: DSA, 2013, pg 58, brackets mine.  

Community Renewal as Incarnational Mission

Missonal, Incarnational, and Stewardship are terms that are too easily tossed about these days. In order for the people of God to bring about flourishing in our communities we need real definitions and concrete manifestations, rather than vague illusions of what they mean.   

Urban Homeless Shelter

I believe to be, or take part in something missional is to become part of what we recognize God is already doing in the community (missio Dei). This requires examination of the sociological, historical, and political conditions in which the Church—and our ministry—must become the visible expression of God to the world. When these realities are properly merged we see truly incarnational mission at work – through which we become stewards of God’s grace, justice, and resources of the Kingdom.

An incarnational mission involves our “real and abiding presence” in the community that bears fruit for both the local church and the urban environment. One cannot become part of the organism of community unless he or she becomes intimate with its “cultural rhythms, life, and geography” (2003a, 39); as Ronald Sider shares, “Holistic ministry is incarnational ministry . . . it’s God fleshing out the truth of the Gospel.” It is not only helping others in the community, but inspiring the church member and stretching themselves outside their traditional sphere of influence (2002, 27). Are we bold enough to commit to an incarnational model as sufficient to match the changes in culture and polity we face in this new millennium?

When efforts are not incarnational, little of lasting note gets done – this can lead to negative issues . . . and those seeing themselves in the “crosshairs” of perceived do-gooders begin to see themselves as “targets” rather than in community (2003b, 108). Becoming part of our community through assimilating its culture and recognizing context takes time and effort, which is necessary in order to build a missional bridge of any permanence. 

Fresno Rescue Mission's new Save the Children Home

This integration will take visionary church leaders who are able to assess the needs of the community, as well as considering the strengths within a congregation, and to build individual team leaders who can lay the groundwork for a safe and appropriate missional outreach (2006b, 32). I mention “safe” as there is danger in not considering the full impact of an urban environment when developing programs. This type of missional outreach can allow people to step beyond the “soup-kitchener” experience and into a more personal and contextual missional expression of their faith and lifestyle. 

Such change can only come through a concerted effort of our church leaders, ministries and community agencies in creating a bias for action through educating congregants in missional stewardship of all that they control – time, treasure, and talents.

Frost, Michael, and Alan Hirsch. 2003a. The Shaping of Things to Come: Innovation and Mission for the 21st Century Church. Peabody: Hendrickson.

Linthicum, Robert. 2003b. Transforming Power: Biblical Strategies for Making a Difference in Your Community. Downers Grove: IVP.

Roxburgh, Alan J. and Fred Romanuk. 2006b. The Missional Leader: Equipping Your Church to Reach a Changing World. San Francisco: Jossey-Bass.

Sider, Ronald J., Philip N. Olson, and Heidi Rolland Unruh. 2002. Churches That Make a Difference: Reaching Your Community with Good News and Good Works. Grand Rapids: Baker.

A Case for a New Leadership Paradigm

We are in a world of change as paradigms are being challenged. Gone are the days of the broad community acceptance of the Christian service provider. Postmodernism is taking its toll . . . leadership is changing, urban demographics are changing, legal regulations are changing, staff and boards are changing, donors are changing, and ministry core services are changing. Change is as certain as the sun rising.

In this day and age, faith-based service providers and their staff need to be on the cutting edge to keep up with an ever-changing environment that challenges the sustainability of the mission and vision of an organization. In order to meet these challenges there needs to be a constant – and two critical constants are proper stewardship and increasing core competencies through accreditation.

Stewardship of the organization, program curriculum, staff resources, liabilities, finances, and board governance are paramount – and most importantly, is stewardship of the physical and spiritual health of the leader.
Artios Institute provides collaborative accreditation through coursework designed with stewardship as the focus. Through a peer cohort of fellow leaders, development staff and board members, your knowledge, skills, and capacity for change is strengthened and profound impacts are cultivated. In this two-year course, meeting two and a half days every other month for the first year and three times the second year, we will explore four foundational pillars:

1. An Understanding of Biblical Stewardship, Fund Development & Advancement 
2. The Keys to Balanced Personal & Professional Growth of the Leader 
3. The Core Components of Building Boards & Effective Teams
4. The Role of Strategy in Determining Vision & Direction 

Whether you are a seasoned executive or development leader, or just starting in ministry, this course of study will challenge and strengthen you and your organization – and prepare both for the challenges of today and years to come. This is an investment in stewardship you can’t afford not to explore. Examine the course elements and consider Artios Institute for yourself and your team.

  Review the Four Pillars               Examine the CCNL Credential

Vocations Empowered for the Common Good

This morning’s speaker at Grace Brethren Church Long Beach, Dr. Steven Garber, founder and principal of the Washington Institute on Faith, Vocation and Culture spoke on being stewards of our common grace for the common good.  His comments related to how the grace of God in a life committed to Him can impact the world for the Kingdom.  Our vocations, when empowered by God’s grace, fulfill the Church’s responsibility to impact the Kingdom life here and now, not just in the hereafter—socially, politically, and economically.  This discussion recalled my studies at Fuller on social advocacy and in particular one particularly powerful statement by Dallas Willard which gave credence to thoughts I’d had on charitable programs.

Willard makes a similar point to Garber’s in The Spirit of the Disciplines that “charity and social welfare programs, while good and clearly our duty, cannot even begin to fulfill our responsibility as children of the light to a needy world.”  He then boldly calls upon the people of God to “assume the responsibility, under God and by his power, of owning and directing the world’s wealth and goods” (1988:202).  He points out that by doing so, with Christ, the church would be able to reduce the causes of poverty.

That is a level of stewardship the church has not attempted on such a large scale—and likely will not—without realizing that the sacred calling of God is not just within the church, but in all vocations and careers. He continues the challenge by declaring the church should commission men and women into “farming, industry, law, education, banking, and journalism with the same zeal previously given to evangelism and missionary work” (1988:214).

Once the people of God are involved as stewards in influencing the marketplace for the community’s good, they can have a hand in advising public agencies in serving the truly needy.  This culminates in the people of God showing how the church “enters into full participation in the rule of God where they are” (1988:218).  That is true stewardship of all that God has made and put under our authority, including social service to those in need.  Religious control of social functions, as it has been in the past, can be seen as an authentic Christian response to need.  P. Beyer, in Religion and Globalization states that this validates the Christian message (1994:197).

By becoming stewards of God’s love and compassion through charity, the church becomes a centripetal force in the world.  Serving societal needs as part of the soteriological effort of the church is the greatest stewardship of all God’s resources, and becomes the attracting light the world seeks.  In the words of Bernhard W. Anderson, “The nations are attracted to Zion, the spiritual center, because the teaching that goes forth from that source appeals to the deeper human longings for šālom (peace, welfare).  Mission is at its best when it brings something to a people that respond to their deepest desire and quest” (2006:116).

• Beyer, P. Religion and Globalization. Thousand Oaks: Sage, 1994.
• Okoye, James. Israel and the Nations: A Mission Theology of the Old Testament. Maryknoll: Orbis Books, 2006. 
• Willard, Dallas. The Spirit of the Disciplines: Understanding How God Changes Lives. New York: HarperCollins, 1988.

Fundraising isn't about the ASK

The ASK is all about relationship and trust.

I have a lot of experience in nonprofit ministry wherein we are dependent upon others for support of our programs, operations, and our salary.  A difficulty of most organizations in this sector is fundraising; asking people for money.  I believe that is due to a lack of a focus on trust and relationships.

Much of nonprofit fundraising training and practice focuses on marketing and communication.  Too much, I think.  What that focus may not clearly understand is that people want to be an integral part of the doing of good – of the ministry which meets needs and changes lives.  What they don’t want is to be seen and used as a “target.”  But all too often nonprofits see and use their clientele and donors as targets: one to do good to, and one to fund it.

Both our recipients and our donors want to have a relationship with us – but on their terms, for their purpose.  I think the secret of successfully providing services and responsible fundraising lies in how we relate to them. For both, respect must be openly given, without expectation of reciprocity.  How do we provide respect?  Through our relationship and building trust . . .

My learning curve began as a technical support missionary with Wycliffe Bible Translators as we learned their partnership development (i.e. fundraising) mantra of “Full Information, No Solicitation.”  When Leslie and I built relationships and communicated the mission and vision of Bible Translation, this brought buy-in and people desired to trust us with their investment. It didn't hurt that we traveled across the country with our four children in a '74 VW Camper and people we stayed with saw us interact as a family, warts and all.

This paradigm was clarified for me so powerfully today through a video from the TED Conference and an unlikely teacher of the ASK, “Amanda Palmer: The art of asking” (click to view)  I think you will understand as you share in Amanda’s experience in building relationship and trust as you watch.

Are you willing to become as vulnerable to, and trusting of your clientele and donors?  It's what the ask is really all about.

The Decline of Unpaid Internships

The decline of the unpaid internship has hurt businesses, nonprofits, educational institutions, and students in the years following new rulings and regulations from federal Fair Employment and Housing, the IRS, and over-regulated states like California.

While leading nonprofits I have been asked on many occasions to take on unpaid interns. As one who tries to do the right thing in the right manner, early on my research revealed that many internships are handled under the radar and put the nonprofit or business at great potential risk and liability. An officially authorized internship via an academic program which provides credit for the internship is merely an initial requirement. There are strict criteria by which the internship must be controlled:

1.     The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment.

2.     The internship experience is for the benefit of the intern.

3.     The intern does not displace regular employees, but works under close supervision of existing staff.

4.     The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded.

5.     The intern is not necessarily entitled to a job at the conclusion of the internship.

6.     The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

Internships are not only limited federally, but state Worker Compensation is also applied if the internship is not properly authorized and covered through an academic institution’s insurance. 

Locally, CA State Long Beach has established a formal application and authorization agreement between itself, the professor, student, and employer – thus protecting all parties from liabilities. Even so, there have been numerous rulings against nonprofits and businesses wherein compensation and fines have been levied. Not to mention the intern who feels slighted and sues the employer for compensation, overtime and/or Worker Compensation benefits.

While these regulations were put in place to protect the intern and internship program from being abused, they unintentionally serve to decrease educational and on the job training opportunities and reduce the involvement of students in nonprofits – thus reducing the practical training and skills for college graduates to take into their careers.

I caution the business and nonprofit who may wish to utilize interns in their workforce to step into this area fully aware of the regulations and potential cost of violations. Do the right thing in the right manner . . . and both you and the intern will benefit.

Oh . . . and especially don’t have them make the coffee or be your go-fer.

Some helpful links:

http://wdr.doleta.gov/directives/attach/TEGL/TEGL12-09acc.pdf

http://www.nytimes.com/2010/04/03/business/03intern.html

http://internships.about.com/od/internships101/a/departmentoflaborsnewguidelinesforinterns.htm

Are corporations once again picking up the slack?

Although the industrial age has historically been considered a major contributor to poverty, and thus, an increase in the need for charity, a number of industrialists such as Henry Ford and Andrew Carnegie considered it their responsibility to address these concerns. Ford made new inroads to the hiring, treatment and accommodation of those in need—or charity, as it was viewed in that day. He designed a third of his factory jobs specifically for the disabled so that they could make a living wage. Ford's view of poverty was to “fix the train tracks first” and then help people help themselves.*

Andrew Carnegie believed it wrong to die rich, and purposed to live within a set means and endeavored to give away the balance of his income for the rest of his life. Both men are considered founders of the modern philanthropic movement. From this point onward we see a growing philosophy for a corporate, or central, responsibility for society rather than the local community or the church. General welfare, once supplied via the church, was hereafter seen as the duty of agencies, corporations, and governments—and funded primarily through taxation.

I believe we are once again seeing more so-called "one-percenters" becoming more personally responsible for those around them as were Ford and Carnegie.

*Guinness, Os. Doing Well and Doing Good: Money, Giving and Caring in a Free Society. Colorado Springs: NavPress, 2001, 232.

Starting a nonprofit revisited

Once again a recent question from someone starting a nonprofit brings me back to this topic. I will share an edited version of an e-mail response to some serious questions someone asked on seeking help getting funding, for what he sees as unique and critical services.

Bob:

Blessings to you! You are attempting daunting tasks.

First, be careful of making claims of exclusivity... other local providers do similar, if not identical work that you share here. Sometimes under the radar as you are. You may unintentionally alienate yourself from other providers you will need to work with.

Ensuring accountability is a first step for funding requests. To whom are you accountable? Who is working to assist you (church, board, committee)? Do you have a clear, well written case for support? In trying to understand all the areas you are attempting to serve I would ask if you aren't biting off too much and are at risk of choking on your own good works. Start with one thing, get good at it so you are sustaining it before adding an additional service.

It also brings up legal issues to ensure you are covering...to protect yourself and those you serve. For example: Are you a registered sober living home in order to be under the protection of state regs (so local codes don't apply)? Do you have appropriate program documentation to protect against federal fair housing laws and claims of discrimination? Funders will need assurance you have legal oversight as well.

"Tentmaking" (funding through outside income) is still a viable method of starting and funding a ministry, but the above questions are still relevant. God's clear leading should/will be accompanied with like-minded people wanting to help.

Quite a few people ask me about starting a nonprofit, and I always state, "DON'T"!

First couple yourself with a local or nearby similar organization and work under and with them -- and learn. (When my son wanted to get a horse, he spent a year volunteering at a horse ranch before buying his own) Oft times, after proving yourself, they will be open to suggestions in serving your area of interest. Then, and only IF that organization's goals do not match what you see as a clear leading from God, should you strike out on your own...hopefully with their blessing and support. I never endorse a new work too similar and too close to another viable current work unless the goals are significantly different. Dilution of your community's support and donor funding, along with a potential competitive spirit and confusion to the public serves to harm the ministry. This happens far too often.

These are just a few items for discussion. Let's meet at our fall conference and talk more about it. 

Blessings!  Read my article: Critical Shift

Want to start a new nonprofit? Don't!

Want to start a new nonprofit? Don't do it! Well, at least not yet . . . Instead, involve yourself in a similar existing nonprofit; increase or broaden their capacity; and learn from them... Then - and only then! - only if your service and mission are dissimilar enough, should you consider a new nonprofit. What usually happens with the growth of new nonprofits in a community today is a tragic duplication of services and a dilution of funding across the sector - weakening all nonprofits. Collaboration is the "critical shift" for both new and old nonprofits alike.
Click to read my article:

Do You Launder "Tainted" Donations?

Is there any donation for which the source of would require your nonprofit to refuse? What do you consider tainted money? Gambling, soft or hard liquor sales, non-PC investments....? When would you say "no thank you" to a donor? Or does it matter, and why or why not? When should the nonprofit responsibly scrutinize the source of charitable donations?

Nonprofits need to ask these questions.

Usually it is the Christian or other organization that takes a moral stand on issues, or serves at-risk clients, that questions the source of their funding. Some foundations limit allocating investments to those funds they consider socially responsible. Boards are now developing donor policies that prohibit investments and/or donations perceived as not being in alignment with the organization’s core values. However, in this season of economic decline, can nonprofits afford to be picky? As a nonprofit CEO whose organizations serve those affected by addictions, I’ve had to wrestle with this question.

During a round-table discussion with other homeless shelter executives, this topic came up and the responses were from both extremes: While one CEO based in California’s wine country readily accepted the lead donation for a capital campaign from a famous vintner, a fellow CEO denounced that, stating in no uncertain terms that he would never accept such a tainted gift.

A personal experience came after giving a tour of our homeless shelter ministry to a local businesswoman who owned a high-end restaurant and custom jewelry and art gallery on upscale El Paseo Drive in Palm Desert, CA. Upon exiting our aging women’s’ shelter, with her eyes misting over, she exclaimed she was going to help the Mission build a new shelter. She created a fundraiser titled “Winefest: Celebrating Wine, Food, and Art.” She flew in top restaurateurs, vintners, and art for one night in her art gallery; and invited her clientele, including Stephanie Powers and Clint Eastwood . . . and underwriting the total cost of the event. At $500 a head, and exotic auction items from celebrity clients, she raised $750,000 in three years – enough to purchase 8 acres for a new shelter campus! How could we not accept such heartfelt charity, especially as it was her event, with little participation from Mission staff or board!

Or the call I got from Jesse James’ executive assistant asking if my organization would like to be the recipient of the annual West Coast Choppers charity motorcycle rally. Should I accept a $5000 gift from such an infamous character? (I did readily accept it, but that was prior to his life hitting the fan). These are examples of donor-owned and directed events – of which we were the recipient. I would not have necessarily created either event, nor sought out these donors to do so for us.

Have we considered what service and ministry we provide to donors in accepting their donations? Realistically, each nonprofit will have their own limit to undesirable funding. At some point that decision will have to be made – and such a decision should be made prior to having to make it. What should constrain donations to your organization: your mission, core values, media coverage that construes ill will with a major portion of your donor base – or that triggers community sensibilities? Does the questionable donation seek to control your program services or pull you off core purposes, or does it provide public notoriety to the donor?

I sometimes wish we had such a problem more often, as deciding whether to accept large donations . . . but somewhere in the midst of our policy and practices, we are making that decision daily without realizing it. There is a limit to what scrutiny we can provide into our donors’ charitable intentions. However, where there is clear intent of a donor to personally benefit or control, nonprofit executives and boards need to be willing and able to “just say no.” Otherwise, don’t look a gift horse in the mouth.

PACS Need to Collaborate to Ensure Continuity

Along with the recent termination of the Long Beach Redevelopment Agency (LBRDA) by our benevolent state government, our four Project Area Committees (PACs) have been shut down. These citizen-led PACs were made up of property and business owners working together to assist in the guidance and revitalization of our local communities. By their very nature each focused on their sphere of influence – under the umbrella of, and receiving funding from, the LBRDA. Their desire for speaking into the process of community development does not end with the death of our RDA, however. Each area group is now actively taking steps to reconvene as independent bodies through incorporating as 501(c)(3)s, seeking funding, in order to continue to act in the best interest of their communities.

That is all well and good, until one examines the effort and costs of creating four different nonprofits, acquiring insurance, grant writing, and ultimately seeking funding from the same sources – in effect competing against each other toward the same goals. As a former Central PAC member, and having recently written a project paper on the need for nonprofits to collaborate in operations and back office administration, I have attempted to share with the leadership of these groups the wisdom of a joint venture. Utilizing an umbrella nonprofit with a collaborative board made up of leaders from each area, sharing costs of insurance and administration, and participating in bundled grant writing, would serve to multiply its collective political clout, decrease duplication, prevent dilution of funding streams, and reducing confusion for funders.

But that caution is falling on deaf ears, as these groups seem blindly committed to riding out as Lone Rangers, refusing even the basic collaboration that would serve to sustain them in the long haul. Their individual special interests are acting as blinders, hindering them from seeing the vast benefit of a joint venture. A potential cause is several of their leaders seem to have no interest in giving up the reins of their respective PACs, choosing rather to hold onto what power their titular positions afforded them. Lacking a collaborative central leadership and organization will make the process difficult and create more division than unity, confuse rather than coalesce, and weaken rather than strengthen their cause.

It would be in the best interest of the city for some existing entity to step forward to facilitate a more persuasive plan for an umbrella organization rather than allow a disjointed effort by these well-meaning, but misguided citizens. The future of community development in Long Beach may depend on it.

we're expecting from the world what we're not doing

While I am shocked that American's spent $1.5 billion this past week at an infinitesimal chance at winning a lottery, I hold more disappointment for the Church. Why? A mere tithe of that amount could have put a huge dent in the issue of homelessness. However, the issue is rooted in a lack of stewardship.

Recent news stories are evidence of the Church’s failure to provide needed steward leadership. Faith leaders decry the recent GOP budget proposal, citing its oppression of the poor. Critics charge that it balances the budget on the back of the poor while not sufficiently taxing the wealthy. Members of the Faithful Budget Campaign demand more aid supported by increased taxation – calling on national leaders to: “act with mercy and justice by serving the common good, robustly funding support for poor and vulnerable people, both at home and abroad, and exercising proper care and keeping of the earth.” The incongruity for this writer is these leaders want the government to do what they are not doing – at least not to the extent that the historical Christian Church has done on its own.

They’ve forgotten that subsequent to Christianity becoming the accepted religion of Constantine’s empire, “government” resources supplanted the Church’s role as provider of public assistance. It was during this period that the response to needs became institutionalized as social service. What had been considered personal hospitality became separated and distant from the church and the home. Charity became so far removed from the church that in the fourth and fifth centuries John Chrysostom challenged that “hospitality remained a personal, individual responsibility as well,” urging Christians to make a place for the needy in their homes to serve “the maimed, the beggars, and the homeless.”

Even Emperor Julian (a.d. 362) provides historical evidence of Christian charity as the sole responsibility of the Church, and directed those of his own religion to “imitate Christian concern for strangers,”

“For it is disgraceful that, when no Jew ever has to beg, and the impious Galileans [Christians] support not only their own poor but ours as well, all men see that our people lack aid from us. Teach those of the Hellenic faith to contribute to public service of this sort.”

Later, John Calvin admonished the Church, for the “demise of ancient hospitality,” toward those in need:

“This office of humanity has . . . nearly ceased to be properly observed among men; for the ancient hospitality celebrated in histories, in unknown to us, and [public] inns now supply the place of accommodations for strangers.”

He warned that the increasing dependence on inns rather than on personal hospitality was an expression of human depravity.

I don’t see the Church giving nor serving as it should; many merely call for more government action. While current church-based giving has reportedly dropped by $1.2 billion last year, it’s still a reality that if Christians tithed, the resulting funding available to God’s work would be nearly 2/3rds of recent stimulus spending. But it’s not just the lack of funds at issue; it’s what ministry leaders are misspending. Currently the families of Trinity Broadcasting Network and Chrystal Cathedral are fighting over millions of assets and control of their empires. The public is treated to weekly reports of misuse of charitable donations and the breakdown of relationships in various ministries. It’s no wonder Congressional leaders on both sides of the aisle are considering capping charitable deductions – to both secular and religious organizations.

If that isn’t enough, nonprofit postage rates are at risk, as well as the definition of what constitutes a “religious” organization. Non-sectarian religious nonprofits may face raising funds without such exemptions and tax-deductible benefits; likely crushing many under fiscal collapse and dissolution.

The Church needs to do what it is supposed to do . . . without the assistance of taxpayers. I find no directive to love one’s neighbor after first raising taxes. On the contrary, we are to give unto Caesar what is Caesar’s and unto God what is God’s. To expect of the world what is our responsibility is falling short of steward leadership. To fail at stewardship is to fail in our faith.

AGRM DC Forum on Policy and Advocacy

Spending a couple days in the seat of our republic for most people is an exercise in observing history, memorials, and art – not necessarily an observation of our political process . . . unless one goes there to influence that process in order to get something (if only a gallery pass). In joining 38 fellow leaders in our Association of Gospel Rescue Missions, I spent two days doing the latter . . . not to get funding, but to ask for continued ability to serve our community.

You see, many of the regulations that come from DC hamper fundraising and provision of services through onerous regulation and tax law. The issues we took to the offices of our Congressional representatives involved: a cap on charitable deductions; a potential loss of nonprofit postal rate discount; fixing vehicle donation rules; and the erosion of the definition of “religious organization” by narrowing it to an ecclesiastical church. My observations of our issues and meetings with representatives are mixed.

In sharing with staffers (who actually wield the power in DC), their response varied according to party and office. My meetings with two Senate staffers were met with a measure of aloofness and push-back against our issues. Even though we weren’t asking for funding, they made plain to us that our requests were clearly seen as expenditures; any reduction in tax revenue due to charitable deductions was a loss to them. As if the money was already theirs to begin with . . . and there was little admittance of savings to government services due to the services we provide. It was obvious that they saw what we do as within their preview. When one asked for the CBO “score” of our legislative issues it was evident that the gain or loss to tax revenue would be the deciding factor rather than principle. One actually began to argue with our position on religious exemption with their partisan argument of the need for government to ensure equal access, rather than address the long-standing moral exemption provided to religious organizations.

On the other hand, congressional staffers took more time and asked questions – sometimes surprised at our statistics of services provided and impact of regulations on our operations. A lot of notes were taken, and there seemed to be genuine interest in what we do and the struggle we have in this economy. Their raised level of interest was perhaps because the representatives are closer to us and our issues – if not outright concern for their constituents (and that we would take the time to visit them). When I shared that because of withdrawing principle from an investment in response to our emergency funding request, one donor paid more than 30% tax on their charitable gift, the absurdity of that issue hit home.

As mentioned earlier, it was evident who controls the inflow of information to our elected leaders. But it was brought home when I heard of one representative who, upon leaving the office for a 15 minute floor vote, asked the staffer, “This one is a YES, right?” I think we need to trust these staffers as much as those we actually elected to get our message to them.

Do I think it worth the efforts of the thousands of people who make the trek to DC each day to bring issues and requests to staffers – and hopefully to our elected representatives? I think so . . . it was obvious that some of what we shared was news to them and brought a fresh understanding of how regulations and legislation affect those of us who provide critical services to the most at risk in our communities. WE are the safety net – not government services. Although a letter can do some of that – sitting across from us, hearing our stories, and seeing our concern will, I believe, accomplish so much more . . . if only continued freedom to raise funds and serve others in the Name of Christ.

Noble Development vs. Toxic Charity

Food coops that donate to needy individuals who are not personally involved in the process can deter from the long-term goal of self-sustaining development. To be more effectively developmental charitable coops should invite underprivileged families to come and be involved in the process from scratch . . . Thereby cultivating their pride as well as their sustenance. They could then sell or trade the excess in a farmers market to buy other needed food items -- or donate to a shelter that provides for emergency shelter and meals. To do so for people beyond their emergency need unfortunately turns the noble effort into "Toxic Charity".

http://fcsministries.org/books/toxic-charity/

"Churches and charities have fallen into the bad habit of creating programs to help the poor when in reality the only people they are helping are themselves, creating a toxic charity that needs to be reexamined and fixed. In this groundbreaking book, Lupton shows how good-intentioned people are actually hurting the very people they’re trying to help. The poor end up feeling judged, looked down upon, only worthy of charity and handouts that end up making them more dependent instead of learning skills to help themselves. Churches and charitable organizations, though good-intentioned, have missed the mark when it comes to serving the poor, creating a toxic form of charity. Lupton says that a better system would be to treat the poor as business partners, empowering them to start businesses, build houses, plan communities, etc. He offers specific organizations as examples of this healthier model of charity and gives practical ideas for how to get involved in service projects that truly help. Together, we can serve our world in a way that actually effects life-altering change."

Kodak's failure was in their contentment with the status quo

Eastman Kodak was one of the best for-profit companies I have ever worked for. It was first to develop digital imaging capture techniques . . . but that was at the height of the film business and they were fat and happy, sitting on top of their bankroll and the industry. Failing to grab an opportunity was their downfall. At the core was the limited vision of the leadership.

Successful companies act strategically in down times in preparation for the upswing - lest they lose their edge and miss an opportunity. A good blog from David Curry on this: http://t.co/gYcpCluJ

A lesson for nonprofits: If you have reserves to expand and lay the groundwork for additional services - especially when the need is great, and your programs are successful - don't hesitate to use those resources. Perhaps that's why God provided them in the first place.