The NonProfit Times - January 1, 2009 - (Page 18) STREETSMART NONPROFIT MANAGER Continued from page 12 The glide path down from the burst took several months to get established. Nonprofits with fiscal years ending in June were probably minimally affected. Those with fiscal years ending in September were similarly spared, especially because organizations with September year-ends typically get a large part of their funding from the federal government. But by the time giving season rolled around again in the fall of 2000, the downturn was firmly established. It became rooted during 2001, and fiscal years ending during that period (and later) typically registered massive red ink. Individual donors hold back from giving during the front end of a recession. Pri- vate foundations don’t necessarily feel a recession the same way, but the money available for grants declines because the value of portfolios drop along with the general economy. Foundations interested in perpetuity will follow formulas that begin ratcheting down total funds available for gifts. But none of this affects nonprofits with the immediacy characteristic of commercial transactions. This is the essence of why the nonprofit sector is recession resistant, not recession proof. Bad news unfolding in the larger economy takes a while to reach nonprofits the way a severe thunderstorm is seen well before it rattles the eardrums. The reverse is true too. Donors, burned by the recent downturn, might ‘‘ There is every reason to expect that this recession will act like previous ones. In many ways, it already has. hold back a bit until the good news is confirmed. Foundations might see the good news in the value of their portfolios, but the same cautious grantmaking that was slow to accept the downturn will be slow to embrace the up-tick. Once reduced, government funding typically takes a while to return to previous levels, if it ever does. There is every reason to expect that this recession will act like previous ones. In many ways, it already has. State governments, major funders of large swaths of the nonprofit sector since Ronald Reagan bent the revenue streams in their direction away from the federal government, starting making serious cuts during the last several months of calendar year 2008. The biggest effect of those cuts won’t really start showing up in nonprofits’ revenue lines until right about now. Private foundations started pulling back during the second half of last year. The grants they would have made in 2009 will leave budget holes in nonprofits that managers will be scrambling to fill in the early months of 2009.They will conclude that immediate action is necessary (if they haven’t already), and the cuts that ensue will spread throughout the rest of that calendar year. Red ink will flow in abundance next year, as virtually all endowed organizations will take unrealized losses. Many foundations will cut back and/or slow their pace of grantmaking. These losses are already locked into place at the time of this writing, barring a record-setting Wall Street comeback. Next year’s recession resistance will decline dramatically as operating revenues decline due to short term givers’ reflexive reaction to the economic pinch. What the market loses, it usually regains. Eventually, stable economics will return. Short-term givers will rebound first, and the big money from endowments and Wall Street-driven activity will start coming back next. Streetsmart managers will be anticipating the signals of the rebound, having taken whatever advantage they can while things were going downhill. (See “Opportunity is Knocking” in the January 2008 issue of The NonProfit Times for how to do this).They’ll be ready to do the same as the upswing gains momentum.This route is already charted. It needs only dates and timelines to be complete. This too shall pass. NPT Thomas A. McLaughlin is a national nonprofit management consultant with Grant Thornton in Boston. He is the author of the book Nonprofit Strategic Positioning (John Wiley and Sons, 2006).His email address is thomas.mclaughlin@gt.com BOARDS Continued from page 11 DENNIS MILLER • How would you describe the CEO’s communication style? • What recommendations, if any, would you make to improve the CEO’s performance? • How would you describe the board’s relationship with the CEO? • Who has responsibility for fundraising in the organization? • What is the board’s role related to fundraising? • What recommendations would you make, if any, to improve fundraising for the organization? • Do you make an annual personal gift to the organization? To dramatically improve the work of the board, one has to assess the level of engagement and motivation of their board members with the organization. Only through engaging and motivating members of their boards can nonprofits truly achieve a culture of success by integrating board governance, visionary thinking and philanthropy. NPT Dennis C. Miller is president and chief executive officer of Dennis C. Miller Associates in Morristown, N.J. The firm’s Web site is www.dcmillerassociates.com His email is dmiller@dcmillerassociates.com • What recommendations, if any, would you make to improve the process and plan? • How would you describe your level of excitement about seeing this vision become a reality? • What do you like about being on this board? • How meaningful and fulfilling has been your experience serving on this board? • How would you describe your level of engagement with this organization? • How would you describe the board’s level of engagement with the organization? • How effective are the board meetings? • What are the strengths of the current board? • What areas of improvement are needed? • What is the image of the organization in the community? • What recommendations, if any, do you have for improving the image of the organization in the community? • How does the board measure the success of the organization? • How does the board ensure that the organization provides value to its key stakeholders? • How would you describe the strengths of the CEO? CLOTHES SENSE Continued from page 5 DONOR INTENT Continued from page 9 purposes,”Tilghman said.“We agreed to this settlement so that we could bring the rapidly escalating legal expenses to a halt before a lengthy trial added even more tens of millions of dollars.The settlement also allows the Banbury Fund to resume funding the charitable objectives for which it was established, and it restricts the spending of the new foundation to activities that are compatible with the purposes we serve in carrying out the terms of Marie Robertson’s gift.” Even though the case was not tried to its conclusion, Malone said it’s still a landmark that has had a huge impact on the world of philanthropy, both benefiting donors and charitable recipients.“No university has ever returned anything close to $100 million,” he said. “People always understood donor restrictions are something you had to pay attention to. Now everybody understands, you have more than a moral obligation to honor the donor’s restrictions, you have a legal obligation.And when people play fast and loose with donor restrictions they will be held accountable in a court of public opinion and a court of law,” Malone said. “This is no dig on Princeton, but defendants always, when looking down the barrel of a real trial date, that’s when they get serious,” Malone said. Once retired Judge John Pratto was assigned to preside fulltime and a trial date was set, “the parties got serious and everybody’s better off,” Malone said. NPT nations are down, you want to have more exposure, and yet the means of getting that material is through the truck pick-ups when gas was over $4 a gallon,” said Maj. Hood. “So, you are strapped. How much can you put into operations when donations aren’t coming in and you have to handle the burden of all the overhead costs to keep the program operating? It’s been a real battle and nothing has let up.” The operating expenses include maintaining truck fleets and buildings, with all the same challenges a retail store faces, and the vocational training that the stores provide for rehabilitation center participants are an important part to The Salvation Army mission. The Salvation Army tries to sell and recycle as much material as possible, but still has to spend $6 million annually taking unusable clothing, furniture and other materials to the area dumps, a cost that Maj. Hood said the organization would love to eliminate but is just part of the operation.The organization is taking steps to cut down on donation waste, such as no longer accepting donations of analog tele- visions, which won’t be able to receive a signal beginning Feb. 17, once all television stations broadcast in digital format as required by federal law. Right now, the competition for used clothing competition is steep, with nonprofits competing with consignment shops and for-profit thrift stores. The Salvation Army is trying to tinker with the thrift store branding to increase customers and keep them coming.“Part of the strategy that our guys are looking at is the transition from a thrift store to a family store, trying to create a whole new image and environment for used clothing and furniture because of the competition,” said Maj. Hood. The changes would include higher-quality used items. Newly-opened stores will be branded as Family Stores, but there are no plans as of yet to make sweeping changes across all of The Salvation Army thrift stores. Don’t expect clothing donation partnerships to slow down on the for-profit side.“They are always clamoring for more. They could always use more material,” said Mayberry. NPT JANUARY 1, 2009 THE NONPROFIT TIMES www.nptimes.com http://www.dcmillerassociates.com http://www.nptimes.com
Table of Contents Feed for the Digital Edition of The NonProfit Times - January 1, 2009 The NonProfit Times - January 1, 2009 Clothes Sense Office Web Use Tough To Control Fundraisers Are Going After States Contents Page 4 Diversity In Occupations Drives Successful Boards Princeton, Foundation Settle Donor Intent Case Pulling Out A Rabbit Igniting A Service Nation Evaluating The Evaluator What To Expect Special Report: Accounting Software Advertiser Index NPT Jobs Resource Directory The NonProfit Times - January 1, 2009 The NonProfit Times - January 1, 2009 - Fundraisers Are Going After States (Page 1) The NonProfit Times - January 1, 2009 - Fundraisers Are Going After States (Page 2) The NonProfit Times - January 1, 2009 - Contents (Page 3) The NonProfit Times - January 1, 2009 - Page 4 (Page 4) The NonProfit Times - January 1, 2009 - Page 4 (Page 5) The NonProfit Times - January 1, 2009 - Page 4 (Page 6) The NonProfit Times - January 1, 2009 - Page 4 (Page 7) The NonProfit Times - January 1, 2009 - Diversity In Occupations Drives Successful Boards (Page 8) The NonProfit Times - January 1, 2009 - Princeton, Foundation Settle Donor Intent Case (Page 9) The NonProfit Times - January 1, 2009 - Igniting A Service Nation (Page 10) The NonProfit Times - January 1, 2009 - Evaluating The Evaluator (Page 11) The NonProfit Times - January 1, 2009 - What To Expect (Page 12) The NonProfit Times - January 1, 2009 - Special Report: Accounting Software (Page 13) The NonProfit Times - January 1, 2009 - Special Report: Accounting Software (Page 14) The NonProfit Times - January 1, 2009 - Special Report: Accounting Software (Page 15) The NonProfit Times - January 1, 2009 - Special Report: Accounting Software (Page 16) The NonProfit Times - January 1, 2009 - Special Report: Accounting Software (Page 17) The NonProfit Times - January 1, 2009 - Special Report: Accounting Software (Page 18) The NonProfit Times - January 1, 2009 - NPT Jobs (Page 19) The NonProfit Times - January 1, 2009 - Resource Directory (Page 20) The NonProfit Times - January 1, 2009 - Resource Directory (Page 21) The NonProfit Times - January 1, 2009 - Resource Directory (Page 22) The NonProfit Times - January 1, 2009 - Resource Directory (Page 23) The NonProfit Times - January 1, 2009 - Resource Directory (Page 24)
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