It began in 2008.
As the economy slid over the edge of the cliff, the Nonprofit Sector knew things would change. But it never imagined things would change so drastically, that they would never be the same again.
"Disposable income", even among the wealthy, is no longer in the equation. Nor is "Discretionary Spending."
As in Capital Fundraising Campaigns, nonprofits should be looking not at income, but at assets.
Yours, not theirs.
It's time for the Nonprofit Sector to focus on building assets. Financial assets. Capital assets. Intellectual assets. Human assets. Relationships. Partnerships.
These are the assets that will drive revenue from this point forward. Fundraising is no longer the means of generating sustainable revenue. Asset building is where nonprofits need to focus their efforts.
Development will need to communicate the new focus. When soliciting investment in a particular project or program, it is not enough to show the process, then the outcome. It is not enough to demonstrate the positive impact on those being served. You must show that an asset is being developed for the community, that this asset is how the donor/investor can realize their Return on Investment.
And you leverage their investment to grow assets within the organization -- more revenue, intellectual property, human assets that maximize potential, capital projects that become part of the community infrastructure.
And that you build relationships with your partners, your investors, and your clients. Public/Private Partnership is no longer just a government/business alliance, it must include the Nonprofit Sector as a necessary partner.
As your organization builds these assets, it grows stronger, more sustainable. Until the organization itself is recognized as a valued asset in the community, one which attracts investment and more assets.
It's a New Day. Stop fundraising, start building assets.
Tuesday, November 20, 2012
Monday, November 5, 2012
Public/Private Partnership
At no time in our nation's history has there been as great a need to engage the public, private and nonprofit sectors in partnership.
And not just a funding partnership, where government and business provide funding for nonprofits. A true partnership, with mutually determined goals and objectives, defined roles and responsibilities and a set of projected outcomes that benefit all.
It seems simple, and yet communities across the country fail to grasp the opportunity that such a partnership offers. Either government over reaches, business fails to step up or nonprofits reject anything that involvesfor profit enterprise.
But there have been successes. The Greater Rome Chamber of Commerce in Rome, GA (www.romega.com) has forged just such a partnership, and government, private enterprise and nonprofits are working together for the betterment of the community.
How does it work?
It requires communication, a process to bring the parties together, and most of all, effective leadership. All of the good intentions in the world, or the best facilitators, can't succeed without strong, effective leadership. And the stronger the leaders from each sector, the stronger the partnership and the more successful it will be.
Where to start?
Define areas of common interest. Who benefits when each sector succeeds? Private enterprise creates jobs, which generate worker incomes, who pay taxes, that build roads and schools and provides public safety services, that grows the economy and the population, that creates demand for social services and arts and recreational opportunities and other quality of life issues, that are paid for by public and private investment in nonprofit organizations, that provide these things that enhance the quality of life, that attract new residents and businesses to the community, thus helping create more new jobs and businesses.
This interdependency is acknowledged, but seldom leveraged for optimum benefit. You can't separate community development from economic development, they are so intertwined that you must address them together.
Return on Investment
By investing in the community, with specific expectations from the investors, a clearly defined set of outcomes are drawn. These outcomes represent the Return on Investment for each partner -- public, private and nonprofit. Each sees and receives value from the partnership and from the outcomes. Without capital investment, there are no outcomes. Without outcomes, there can be no Return on Investment. Each partner has a job to do.
Making it Work
The intersection of the three sectors may be the local Chamber of Commerce, Economic Development Agency, United Way, Community Foundation or other institution. But convening the partenrs is the first step. Leaders from each sector must step up and make it work, they must be committed to making it work.
Commitment comes with a cost. In a bacon and egg breakfast, the chicken was involved, but the pig was committed. Leaders must be more than involved and engaged. They must commit to the work, to the partnership, and to the outcomes.
And not just a funding partnership, where government and business provide funding for nonprofits. A true partnership, with mutually determined goals and objectives, defined roles and responsibilities and a set of projected outcomes that benefit all.
It seems simple, and yet communities across the country fail to grasp the opportunity that such a partnership offers. Either government over reaches, business fails to step up or nonprofits reject anything that involvesfor profit enterprise.
But there have been successes. The Greater Rome Chamber of Commerce in Rome, GA (www.romega.com) has forged just such a partnership, and government, private enterprise and nonprofits are working together for the betterment of the community.
How does it work?
It requires communication, a process to bring the parties together, and most of all, effective leadership. All of the good intentions in the world, or the best facilitators, can't succeed without strong, effective leadership. And the stronger the leaders from each sector, the stronger the partnership and the more successful it will be.
Where to start?
Define areas of common interest. Who benefits when each sector succeeds? Private enterprise creates jobs, which generate worker incomes, who pay taxes, that build roads and schools and provides public safety services, that grows the economy and the population, that creates demand for social services and arts and recreational opportunities and other quality of life issues, that are paid for by public and private investment in nonprofit organizations, that provide these things that enhance the quality of life, that attract new residents and businesses to the community, thus helping create more new jobs and businesses.
This interdependency is acknowledged, but seldom leveraged for optimum benefit. You can't separate community development from economic development, they are so intertwined that you must address them together.
Return on Investment
By investing in the community, with specific expectations from the investors, a clearly defined set of outcomes are drawn. These outcomes represent the Return on Investment for each partner -- public, private and nonprofit. Each sees and receives value from the partnership and from the outcomes. Without capital investment, there are no outcomes. Without outcomes, there can be no Return on Investment. Each partner has a job to do.
Making it Work
The intersection of the three sectors may be the local Chamber of Commerce, Economic Development Agency, United Way, Community Foundation or other institution. But convening the partenrs is the first step. Leaders from each sector must step up and make it work, they must be committed to making it work.
Commitment comes with a cost. In a bacon and egg breakfast, the chicken was involved, but the pig was committed. Leaders must be more than involved and engaged. They must commit to the work, to the partnership, and to the outcomes.
Thursday, May 17, 2012
Nonprofit Sustainability: Social Enterprise
As we emerge from the Great Recession, not-for-profit organizations have multiple challenges to face.
Increased demand for social services, but decreased funding. Decreased attendance and funding for arts and cultural programs. Decline in religious giving and church attendance. Pressure from federal, state and local government on tax exempt status and direct competition from government on funding for services.
Dwindling tax revenue has pushed government into direct competition with nonprofits to fund essential social services. And in Washington, DC, lawmakers' talk of tax reform increasing includes discussions on the tax exempt status of nonprofits.
Banks are renewing their call for elimination of tax exempt status for credit unions. For-profit hospitals pressure Congress to "level the playing field" and eliminate tax exemption for nonprofit hospitals. And so it goes.
Churches and religious institutions are safe, for now. But nonprofit educational institutions, membership organizations, mutual associations --- all may see their tax exempt status disappear, or at least, see the charitable deduction disappear.
Many organizations will not survive, if this occurs. Others will embrace entrepreneurial ventures to support their missions, creating a new revenue stream based on delivery of goods or services for pay.
"Social Enterprise" has been around for some time. Not-for-profit organizations engaging in for-profit enterprises to support their missions. Goodwill sells second hand clothing. Girl Scouts sell cookies. These are Social Enterprises.
More organizations are looking at this model, finding ways to support their mission by competing in the marketplace, without risking their mission.
Some money-making ventures can be a part of a 501c3 organization's programs, others may require a separate for-profit venture to be formed. For revenue streams that are not part of an organization's core mission, Unrelated Business Income Tax (UBIT) must be paid. Sales tax must be collected and paid, the same as any small business.
But Social Enterprise may be a sustainable revenue opportunity for many organizations.
A valuable resource is the Roberts Enterprise Development fund (www.redf.org). This organization helps nonprofits determine if they should start a Social Enterprise, and how to go about doing it.
The Small Business Development Center at the University of North Florida is offering a fundraising workshop on August 24th from 1 p.m. to 4 p.m. at the UNF University Center, Bldg. 43, 12000 Alumni Dr. Jacksonville, FL 3222. Call 904.620.2476 for more information, or register on their website at https://www.sbdc.unf.edu/register-workshop-series.php?workshop_groups_id=4#w74.
Nonprofits must rise to the challenge by asserting themselves into the marketplace, and understanding their economic impact and value. Social Enterprise may be part of the answer.
Increased demand for social services, but decreased funding. Decreased attendance and funding for arts and cultural programs. Decline in religious giving and church attendance. Pressure from federal, state and local government on tax exempt status and direct competition from government on funding for services.
Dwindling tax revenue has pushed government into direct competition with nonprofits to fund essential social services. And in Washington, DC, lawmakers' talk of tax reform increasing includes discussions on the tax exempt status of nonprofits.
Banks are renewing their call for elimination of tax exempt status for credit unions. For-profit hospitals pressure Congress to "level the playing field" and eliminate tax exemption for nonprofit hospitals. And so it goes.
Churches and religious institutions are safe, for now. But nonprofit educational institutions, membership organizations, mutual associations --- all may see their tax exempt status disappear, or at least, see the charitable deduction disappear.
Many organizations will not survive, if this occurs. Others will embrace entrepreneurial ventures to support their missions, creating a new revenue stream based on delivery of goods or services for pay.
"Social Enterprise" has been around for some time. Not-for-profit organizations engaging in for-profit enterprises to support their missions. Goodwill sells second hand clothing. Girl Scouts sell cookies. These are Social Enterprises.
More organizations are looking at this model, finding ways to support their mission by competing in the marketplace, without risking their mission.
Some money-making ventures can be a part of a 501c3 organization's programs, others may require a separate for-profit venture to be formed. For revenue streams that are not part of an organization's core mission, Unrelated Business Income Tax (UBIT) must be paid. Sales tax must be collected and paid, the same as any small business.
But Social Enterprise may be a sustainable revenue opportunity for many organizations.
A valuable resource is the Roberts Enterprise Development fund (www.redf.org). This organization helps nonprofits determine if they should start a Social Enterprise, and how to go about doing it.
The Small Business Development Center at the University of North Florida is offering a fundraising workshop on August 24th from 1 p.m. to 4 p.m. at the UNF University Center, Bldg. 43, 12000 Alumni Dr. Jacksonville, FL 3222. Call 904.620.2476 for more information, or register on their website at https://www.sbdc.unf.edu/register-workshop-series.php?workshop_groups_id=4#w74.
Nonprofits must rise to the challenge by asserting themselves into the marketplace, and understanding their economic impact and value. Social Enterprise may be part of the answer.
Friday, March 30, 2012
Wall Street Explained
Wall Street is, essentially, a poker room.
You've got all these poker players sitting at tables. One table has all the pharmaceutical companies playing Texas Hold-em. The next has all the auto companies playing 7-Card Stud. Another has the banks sitting around playing draw poker, jacks wild.
And lined up against the Wall ... are Wall Street brokers. They are making side bets, with investors' money, on each hand of poker. The bigger the pile of chips in front of each player, the bigger the side bet (or stock price)will be for that player.
Some brokers are actually taking side bets that one or more players will lose each hand.
And the House (Wall Street) wins every time, since they get a piece of the action from everyone.
The brokers charge you for the bet, not for the wins. So they can't lose. The only losers are the investors.
It has very little to do with how well each of the players performs, and more on how willing someone is to make a substantial side bet to keep that player in the game.
Over in the corner, at the small stakes tables, are the small businesses. No one is making side bets for them. Occasionally, one of the investors goes over, watches a few hands, and slips a few chips to a player. But largely, they are ignored.
And at the end of the day, the main room has a few big winners and a lot of losers. The small stakes tables are pretty much sharing the pot, although every now and then, one of them gets hot and rakes in a pile. If they do that often enough, they get invited to the main room.
Wall Street is Vegas, baby!
You've got all these poker players sitting at tables. One table has all the pharmaceutical companies playing Texas Hold-em. The next has all the auto companies playing 7-Card Stud. Another has the banks sitting around playing draw poker, jacks wild.
And lined up against the Wall ... are Wall Street brokers. They are making side bets, with investors' money, on each hand of poker. The bigger the pile of chips in front of each player, the bigger the side bet (or stock price)will be for that player.
Some brokers are actually taking side bets that one or more players will lose each hand.
And the House (Wall Street) wins every time, since they get a piece of the action from everyone.
The brokers charge you for the bet, not for the wins. So they can't lose. The only losers are the investors.
It has very little to do with how well each of the players performs, and more on how willing someone is to make a substantial side bet to keep that player in the game.
Over in the corner, at the small stakes tables, are the small businesses. No one is making side bets for them. Occasionally, one of the investors goes over, watches a few hands, and slips a few chips to a player. But largely, they are ignored.
And at the end of the day, the main room has a few big winners and a lot of losers. The small stakes tables are pretty much sharing the pot, although every now and then, one of them gets hot and rakes in a pile. If they do that often enough, they get invited to the main room.
Wall Street is Vegas, baby!
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