We Need You Out There!

Whew! We’ve gone through a lot of information about social impact. If you’re feeling overwhelmed, don’t worry. There’s no hurry and I’m not going anywhere. I’ll be right here by your side along your path to AWE-thentic impact.

If you’re not quite ready to pull out your checkbook or have “The Talk” with your financial advisor, that’s ok. There are plenty of other ways to get started. The important thing is that you begin where you are.

Begin where you are

I believe the best way to get to know an organization before donating or committing to a board position is to volunteer. Volunteering gives you a front-row seat to the inner workings of a non-profit.

You can either volunteer to do whatever they need or be specific about the skills and talents you would like to share. Either way, you will come to know the staff, their mission and programming, the culture of the organization, how things work (and don’t work), who they serve, and how effective they are.

Volunteering gives you a front row seat

Look for an organization in your community that is addressing a cause you feel passionate about. Or, if you want to step out of your comfort zone a bit there are a number of companies that help match you with an organization that can use your help. Here are a few of my favorites:

• Catchafire (catchafire.org): A community of individuals striving to push the social good sector forward by focusing on efficient and effective ways to give back. One way they do this is by matching professionals with nonprofits based on their skills, cause interest and time availability.
• Taproot Foundation (taprootfoundation.org): Connects non-profits and social change organizations with passionate, skilled volunteers who share their expertise pro bono. Through their programs, business professionals deliver marketing, strategy, HR, and IT solutions that organizations need to achieve their missions.
• Volunteer Match (volunteermatch.org): Believes everyone should have the chance to make a difference. That’s why they make it easy for good people and good causes to connect. They’ve connected millions of people with a great place to volunteer and helped tens of thousands of organizations better leverage volunteers to create real impact.
• WomenOnCall (womenoncall.org): Creates opportunities for professional women to volunteer in a more meaningful way by effectively and efficiently aligning their skills, expertise and interests with short-term, high-impact volunteer opportunities.

What are you waiting for? The world needs your gifts and talents, skills and knowledge, wisdom and love. Who knows where the path might take you?  Just begin!

Be AWE-dacious!

The Allure of Impact Investing

Is it possible to align your values and investments? Yes!

By investing in companies that care about more than just the bottom line.

Align your values and investments

Through impact investing you can invest in companies, organizations, and funds whose mission is to generate social and environmental impact alongside a financial return.

Originally called socially responsible investing, it was previously limited to screening stocks or industries. For example, negative or avoidance screening meant you chose not to invest in companies whose products or services were considered harmful such as tobacco, gambling, and pornography. Affirmative screening sought out investments in industries that provided positive benefits such as renewable energy, clean transportation, and natural foods and cleaning products.

Today, socially conscious investors screen their investments using the environmental, social, and governance (ESG) criteria. Environmental criteria look at how a company performs as a steward of the natural environment. Social criteria examine how a company manages relationships with its employees, suppliers, customers, and the communities where it operates. Governance deals with a company’s leadership, executive pay, audits and internal controls, and shareholder rights.

Historically, a sustainable and responsible investment approach did not provide the same financial returns as a more traditional approach that focused exclusively on profits. But that is changing! Data now shows that investments focused on sustainable, long-term social and environmental impact often outperform the market.

Invest for profit and purpose

The industry is still in its infancy and there are challenges to be overcome, but the potential is exciting. One of the greatest challenges is measuring impact. Better quality and more simplified data is critical to make real, large-scale, and lasting differences for people and our planet.

Big name financial players are stepping into the arena which means your financial advisor may be ready to have the discussion if you haven’t already. I’ll be writing more about social enterprises and impact investing in the future so stay tuned.

Be AWE-dacious!

The Promise of Social Enterprises

Supporting organizations that are doing good by sharing your time, talent, and treasure isn’t the only way to make your authentic impact. You can also make an impact through conscious choices about how you spend your money.

As an entrepreneur and philanthropist I’m giddy about social enterprises – businesses whose purpose is to change the world for the common good. Here’s why.

How you spend can change the world for the common good

Many of our social problems remain unsolved due to declining government funding, lack of impact from Corporate Social Responsibility (CSR) programs, and little social innovation from the non-profit sector.

Arguably, one of the greatest challenges facing non-profits is lack of funding. There’s just never enough money to do the things they need to do to make the difference they want to make.

To overcome this challenge many non-profits launch earned-income ventures. In other words, they create a business that earns profits which can then be used to fund the organization’s programming.

An example is “fee for service” in which a non-profit charges for the services it offers its beneficiaries. When possible to do so, this is a fabulous way to create an on-going revenue stream.

Social enterprises use the power of the marketplace to advance their mission

Even more exciting are the abundance of for-profit and not-for-profit social enterprises that use the methods and disciplines of business and the power of the marketplace to advance their social, environmental and human justice agendas. According to the Social Enterprise Alliance, these enterprises are distinguished from other types of businesses, nonprofits and government agencies by three characteristics:

• The organization directly addresses an intractable social need and serves the common good, either through its products and services or through the number of disadvantaged people it employs
• Commercial activity is a strong revenue driver
• The common good is its primary purpose

Around the globe there are a multitude of ideas being implemented to address unmet needs in affordable healthcare, safe water, housing, alternative energy, climate change, education, job training, agriculture, finance, and more.

On the spectrum, social enterprises fall between a traditional non-profit which is reliant on philanthropy and a traditional for-profit whose purpose is exclusively revenue generation.

Profit and Purpose!

Who doesn’t love purchasing from a company with a double bottom line? Profit and Purpose!

For example, Method Cleaning Products whose founders “set out to change the world by creating beautiful cleaning products that are as kind to the planet as they are tough on dirt”.

Or Warby Parker which offers designer eyewear at a revolutionary price while leading the way for socially conscious businesses. Recognizing that almost one billion people worldwide lack access to glasses and therefore cannot effectively learn or work, the company partners with non-profits to ensure that for every pair of glasses sold, a pair is distributed to someone in need. I got me a pair!

And I purchase all of my skin care products from two socially conscious companies, Ann Marie Gianni Skincare and Beauty Counter. Both companies insist on using only safe, non-toxic ingredients in their products and educate their customers about making healthy choices for themselves and their families.

But shopping isn’t the only way to support these organizations. If the social enterprise is a non-profit you can donate directly.

Or, give to a fund which then invests in the company. One of my favorite examples is Acumen Fund founded by Jacqueline Novogratz. The organization raises charitable funds, but instead of giving them away, it makes investments in entrepreneurs who are willing to take on some of the world’s toughest challenges in areas where governments and charities are often failing. Additionally, they work alongside the entrepreneurs offering management advice, technical help, and connections to a wider network of talent.

It takes patient capital to address the world’s toughest challenges

Acumen Fund’s results are measured in social as well as financial terms using an investment style they term “patient capital”. Their investment is longer-term as many of these businesses take years to grow and face enormous challenges to sustainability.

One last thing. Have you had a conversation with your financial advisor about supporting social enterprises through impact investing? It might just be time. Join me next month to learn more.

Be AWE-dacious!

Portfolio of Giving

Your soul searching and due diligence have paid off! You have identified those organizations you feel called to support through your philanthropic giving.

But you’re not done just yet. Now you need to make some decisions about what, when, and how to give.

I highly recommend working with your financial advisor, accountant, and/or attorney to make the best decisions for your personal situation.

What to Give?

What level of engagement do you want to have? Giving can come in the form of time, talent, and/or treasure.

Time = Volunteer

A great way to get to know an organization is to volunteer. Locate a non-profit in your area so it’s convenient for you to make a commitment. Then, ask how you can help. A good organization will welcome your assistance and provide many ways for you to contribute.

Talent = High Engagement

Once you’ve identified an organization that you believe is effectively addressing a cause you are passionate about, you may decide you want to become more involved. High engagement philanthropists realize that social change requires participation beyond donating money. This may include serving on a board, assisting with fund-raising, networking, advocacy, or other purposeful ways of sharing your gifts and talents to support the organization in their efforts to bring about change.

Treasure = $

A critical way to help an organization you trust is to provide funding that lets them carry out their mission effectively today and plan for the future. You are making an investment to address a social ill, so consider a multi-year donation to support the following:

• Unrestricted/General Operating Funds – so they can budget appropriately and decide how best to use the funds
• Infrastructure/Performance Measurement Investments – to support their growth and measure their impact
• Capital Funding – to scale their operations

Donations can be made in a variety of ways:

• Cash, Check, Credit Card
• Appreciated assets such as stocks, bonds, mutual funds
• Name the charity as a beneficiary of a life insurance policy or retirement plan
• Set up a bequest payable upon your death
• In-kind donations

When to Give?

You’ll also need to decide when to give, particularly if you have a substantial amount of wealth to share:

• How much should you donate annually?
• Do you want to give it all away while you’re alive to maintain maximum control?
• Would you prefer to set up a foundation to carry on your legacy once you’re gone?

How to Give?

Aside from giving directly to an organization, there are a variety of giving vehicles that you may want to explore with your financial advisor.

Donor Advised Fund (DAF)

Allows you to set aside charitable funds whenever you choose and take the tax break immediately. You don’t have to decide where to donate the funds until you’re ready. The giving account is housed with a sponsoring public charity such as a community foundation, a university, or a financial institution. With a DAF, the donor makes an irrevocable charitable contribution to the sponsoring organization and loses all legal control over those funds.

Foundation

An independent legal entity established for charitable purposes, which is governed by one or more individuals, a family, or a company. A private foundation gives donors complete control over granting and investment decisions.

Charitable Remainder Trust (CRT)

A tax-exempt, irrevocable trust that first distributes income to the beneficiary of the trust (who you name) for a specified period of time, then donates the remainder to one or more charitable organizations. A CRT provides the beneficiary with cash flow while obtaining a current-year personal income tax deduction.

Charitable Lead Trust (CLT)

A tax-exempt irrevocable trust that first disburses income to one or more charitable organizations for a specified term, then transfers the remainder to an individual beneficiary (who you name). It is designed to result in tax-free gifts to the donor’s family.

Are you a Philanthropist?

What if you don’t have a lot to give, don’t use a financial advisor, have never heard of a DAF or CLT? You’re just hoping to have enough to get your kids through college and retire before you turn 80.

But you have a heart for giving and are passionate about your cause. Can you still be a philanthropist?

Heck, yes! Philanthropy is not reserved for the wealthy elite.  Anyone can be a philanthropist!

It doesn’t matter who you are, what you make, or how much you have in savings. Everyone has something to give.

You have something to give!

Sometimes we hear about people donating millions and even billions to philanthropy and we think our small donation means nothing. So does my $25, $100, $1,000, or even $10,000 make a difference?

You bet it does! The nonprofit community needs the support of donors at all giving levels. So never think what you give is not enough. It’s not about how much you give – it’s about why and how you give.

I suggest narrowing your focus of support to 1-3 organizations addressing the causes you are most passionate about. This way, you can consolidate your giving and have a greater impact.

It costs an organization to process your donation, so a gift of less than $25 is not making much of a difference. You’ll have more of an impact by making larger donations to fewer organizations.

If you don’t have a lot to give monetarily, you can give of your time and talent. Nonprofits can’t operate without a cadre of volunteers. Don’t discount the value you bring by sharing yourself.

We need you out there!

If you have a desire to give, you are a philanthropist. If you want to share yourself in service to the world, you are a philanthropist. If you want to make an authentic impact, you are a philanthropist.

We need you out there!  Be AWE-dacious!

Effective Altruism

“…for those who believe philanthropic dollars are a sacred trust that should be administered according to the highest standards of stewardship.” – Joel L. Fleishman

You work hard for your money and you don’t like to waste it. You’re careful about what you spend and how you invest. But are you also careful about where you donate your hard-earned dollars?

Most people aren’t. Most take a somewhat haphazard approach to giving. They simply write checks to organizations that have a good mission or charismatic leader, places that friends and family members support, causes that they read about or hear advertised on T.V. that tug at their heart strings, the latest disaster or crisis in the news.

That’s not a bad thing. It’s just not the best approach. Not if you really want to make an impact.

If you want to be effective in life you have to be intentional

If you want to be effective in life you have to be intentional. If you want to be a good steward of your money you need to be intentional about what you spend, how you invest, and where you donate.

Begin by establishing an “Annual Review” process for your philanthropy. This way you can strategically plan your giving once a year and make small tweaks as necessary.

Adopt an investor mindset to philanthropy

I advise adopting an investor mindset to philanthropy and creating a “Portfolio of Giving”. Your portfolio should be dedicated to causes you are passionate about that are being addressed by the most effective organizations you can find.

When deciding where to donate ask yourself if your approach is one of charity or philanthropy? Charity is typically an emotional response to a need. Whereas, philanthropy takes a strategic approach to problem solving with the goal of eliminating the causes that necessitate the need for charity.

As long as donors continue to give based on emotion alone there is no incentive for the non-profit community to focus on effectiveness and problem solving. But that’s beginning to change as funders are becoming educated and informed.

You can be a change agent

Your impact can be even greater when you not only address needs but also effect change and encourage greater accountability from the non-profit community. That’s what I want for you. That’s the mission of AWE Partners!

This more intentional approach to philanthropy has many names…strategic, effective, result-oriented, outcome-oriented. What it means is that before you make a donation you ask some important questions:

• What values are important to me?
• What cause(s) do I want to focus on?
• What are the root causes of the problem I hope to address?
• What is the scope of the problem?
• Is it most effective to address the issue at the local, national, or international level, or a combination?
• Is the cause already being addressed and possibly over-funded?
• Where can I do the most good?
• What do I want to achieve through my donation?
• What evidence-based strategies exist for achieving this goal?
• Which organizations are implementing these strategies effectively?
• Is there a group of organizations addressing different aspects of the issue that I can support?
• What are the chances for success and how is it measured?
• What is my risk tolerance?

This does not mean that you have to become an expert. There are many intelligent, hard-working, energetic, dedicated, compassionate individuals working diligently to solve our most pressing social issues. You just have to find those with expertise and experience and support their work.

Multiply the impact of your giving

The truth is, you won’t always get it right when choosing, but the times that you do will multiply the impact of your giving. It’s about the difference you want to make in the world and who you believe has that same conviction and can carry it out effectively.

So do your research, and if you can, get out into the field to meet the team and see them at work.   Then make your decision. Whether it’s gaining more knowledge about the issue or getting first-hand experience you’re becoming a more intentional, impactful giver.

I advise providing unrestricted (not program specific) funding for one year initially. Make your donation and get out of the way. Let the experts do their work and offer advice and support only if asked. Don’t expect them to adjust their strategy or programming based on what you think will work better. If you don’t trust them, you shouldn’t fund them. It’s that simple.

Monitor their progress using the measurements that they use. If after the first year you continue to be impressed with the organization, by all means provide additional, longer term funding and develop a mutually beneficial partnership with them.

Leave the outcome to God

In the end, deciding where to fund will come down to doing your homework, trusting your gut, and leaving the outcome to God. Kinda like everything else in life.

Be AWE-dacious!

Impact Measurement

We all want to make a difference in the world.

We all want to know that our life has meaning and there’s a reason we are here – that we have a purpose.

We all want to make a difference

So when you step into the world of philanthropy wouldn’t it be nice to know if you’re making a difference? Wouldn’t it be nice to know that your time or treasure or talent had an impact?

You can! By taking a more intentional approach to giving you can get a sense of your impact. Not perfectly, perhaps, but enough so that you can feel confident that your giving is not wasted and that your generosity is changing lives.

This is the intent of impact measurement and it’s becoming more and more prevalent in the non-profit sector. However, it’s an art not a science, and we’re all still figuring out how to do it well.

Impact measurement is an art not a science

The process begins with a Theory of Change. This is essentially a statement by the organization that defines how they intend to carry out their mission. What is the problem they are trying to solve, who are they serving, and what do they need to do to achieve their intended result?

A Logic Model then outlines the steps that must be taken for an intervention to succeed. It shows the links between program objectives, activities, and outcomes. A logic model makes clear who will be served, what should be accomplished, and how it will be done.

As you decide which organizations to support through your philanthropic giving, you want to be sure that an organization has a well thought out Theory of Change and a Logic Model to guide them in their ongoing decision making. They should be able to show you how they measure and track program evaluation. This does not need to be complex and does not require a fancy IT system. What it requires is a commitment from the leadership team and board to nurture a culture of high performance and continuous improvement so that they can be as effective as possible in the areas they serve.

The information gathered through this process is critical for two reasons. First, it permits the organization to measure and monitor on an ongoing basis the progress they are making toward reaching their goals. If they are serious about the work they are undertaking, they will absolutely want to capture this information as feedback for their staff to make course corrections as necessary in a timely fashion. This creates a culture of ongoing learning and evaluation which is critical to success.

Second, information about their results and impact is proof that their theory of change is accurate and that they’re on the right track. This is exactly the type of evidence strategic funders like you are looking for when determining where to donate.

If an organization tells you that what they do can’t be measured, it’s a cop out. There is always a way to measure results, even if imperfectly.

What can’t be measured are the “Mystery, Miracles, and Moments of Grace” that happen anywhere people of goodwill are reaching out to those in need. All work that is done from a place of selflessness and compassion is good work. All giving that comes from a place of gratitude and love is good giving. I’m not in any way suggesting that we remove the compassion, care, and concern that are at the heart of the non-profit community.

Look for the Mystery, Miracles and Moments of Grace

But if you want to be sure you’re making a difference, you have to take it a step further. We absolutely cannot and will not make progress on addressing our social ills if we don’t know that what we’re doing has lasting impact.

The mission may sound wonderful, the people may be compassionate and committed, the work they do may be important. But if it’s not effective, if it’s not moving the needle, then it’s time to assist them in their efforts to improve or look elsewhere for organizations to support.

We can’t keep spinning our wheels. We need solutions and you are part of the solution!

You are part of the solution!

Ultimately, your goal is to identify the result you hope to achieve through your giving, locate the organizations who are doing it most effectively, and lend your support through time, talent, and treasure.

This is philanthropy at its best. This is impact!

Be AWE-dacious!

Lis

The Overhead Myth

We need to talk.

Let me start by asking you to picture some of your favorite products or services. It might be that stunning pair of shoes by Via Spiga, the fabulous Kate Spade bag, or a gorgeous pair of Chanel sunglasses. Maybe it’s a spa treatment at your favorite salon or an amazing dinner at the hottest new restaurant in town. Perhaps it’s a dream vacation at an all-inclusive tropical island resort.

Can you see them? Great.

Now, have you ever asked yourself what the salary is of the CEO for the company who provides your favorite products and services? Or have you ever wondered about the company’s overhead ratio? How often do you question management’s approach to running their business?

If you’re like me, you NEVER think about it. You’re simply thrilled that they provide a product or service that you absolutely love and you willingly spend money to reap the benefits of being their satisfied customer.

Why do we try to manage the non-profit community?

So why do we ask these questions of the non-profit community? Why are we so focused on the salary level of a CEO who runs an organization that is attempting to solve our social ills? Why do we insist that management only spend so much on administrative expenses as they attempt to implement solutions to society’s greatest challenges? Why do we not willingly provide the support they need to make a real and sustained impact?

Whenever I ask women how I can help them make more effective decisions with their charitable contributions, 9 times out of 10 they tell me they want me to help them identify organizations who spend their dollars on programming rather than overhead.

You don’t want to waste your money!

I get this! I understand that you don’t want to see your money wasted. And we absolutely must steer clear of organizations that are guilty of fraud.

But when we tell a reputable organization that they can only spend so much on administrative costs we actually limit their effectiveness. It’s been dubbed the “nonprofit starvation cycle” and, thankfully, smart funders are figuring out that this has got to change if we ever want to solve the most pressing social issues of our time.

The non-profit sector needs your support to solve our social issues.

It hasn’t helped that Charity Navigator, one of the oldest and most popular charity evaluators, historically based its rankings largely on ratios of overhead to programmatic spending. But even they are beginning to see the light after receiving criticism from the non-profit and funding communities. Charity Navigator is now in the process of launching an effort to assess how well charities measure and report on their impact.

GuideStar is another online service that helps donors evaluate charities by posting information including the IRS 990 Form for individual non-profits. GuideStar makes no judgments about the effectiveness of the charities, but organizations can earn Bronze, Silver, or Gold Exchange status, depending on how many details of their operations they submit.

GuideStar is also shifting its emphasis from overhead costs to programs and results using it’s “charting impact” questions that focus on goals and accomplishments. The GuideStar Platinum seal can be earned by charities who display the highest level of transparency by sharing measures of their effectiveness and outcomes.

Don’t believe the Overhead Myth!

Charity Navigator, Guidestar, and BBB Wise Giving Alliance have teamed up to dispel “The Overhead Myth” through a campaign begun in 2013. If you’re interested in learning more, I encourage you to explore this at http://overheadmyth.com. There you will find facts about this movement and letters written to donors and nonprofits encouraging an end to the focus on overhead. Here are some highlights:

• Research shows that the overhead ratio is imprecise and inaccurate
• The overhead ratio tells one next to nothing about compensation rates as the vast majority of salary expenses are counted as programmatic rather than as administrative or fundraising
• Organizations that build robust infrastructure (technology systems, financial systems, skills training…) are more likely to succeed than those that do not
• Under-investing in administrative costs is consistently linked with poor organizational performance and sustainability

So now you know! No more focusing exclusively on overhead ratios to determine whether or not to donate to a particular organization.

Now you know!

Members of the AWE Community are smart, strategic and intentional in their giving! Join me next month to discover what you should be focusing on instead.

Be AWE-dacious,

Lis

© 2016

The Vast Ocean of Philanthropy

The philanthropic arena is overwhelming!

I have been involved with non-profits most of my life as a volunteer, board member, employee, and consultant. I have an MBA with a concentration in management of non-profit organizations. I attend classes at the Kellogg Center for Nonprofit Management. I read books and articles, listen to webinars and attend networking events. And despite all of this I am frequently overwhelmed at the size and scope, breadth and depth of the nonprofit sector.

I can imagine that you may be as well, especially if this is not your chosen area of expertise. You have a life. You may have a career, a family, friends, your community. You’re busy!

You have a life. You’re busy!

Add to that the confusion resulting from the array of worthy causes, lack of accountability, cases of waste and fraud, and the fact that massive amounts of aid and charitable giving have been unable to solve our most pressing social issues.

You are passionate about giving of your time, talent, and treasure, but how in the world are you supposed to find the time to understand and wrap your arms around this whole idea of spiritual philanthropy?

I’m here to help.

I’m here to help. I want to take this vast arena and condense it into the information you need to know to make smart, effective giving decisions.

So let’s get started.

First, let’s talk jargon. The nonprofit sector can also be called not-for-profit, charitable, tax exempt, civic, third, independent, voluntary, public interest, and social sectors.

Within the arena there are many kinds of nonprofits, with the IRS identifying more than 30 categories of organizations that are exempt from federal income taxes.

The most common is classified as a “charitable” or 501(c)(3) organization. This classification includes public charities, religious organizations and private foundations. Contributions to these organizations are tax deductible for the donor.

The statistics are startling!

The Urban Institute’s Nonprofit Sector in Brief 2015 reports the following startling statistics:

• In 2013, more than 1.4 million tax-exempt organizations of all kinds were registered with the IRS. Of this number, 1.1 million were 501(c)(3)s or public charities.
• Reporting nonprofits took in approximately $2.26 trillion in revenues and identified total assets of $5.17 trillion in 2013.
• The non-profit sector contributed an estimated $905.9 billion to the US economy in 2013, composing 5.4% of the country’s Gross Domestic Product (GDP) and provided 11.4 million jobs.
• In 2014, an estimated 62.8 million (25.3%) US adults volunteered contributing 8.7 billion hours of service at a value of $179.2 billion.
• Total charitable giving in 2015 was estimated at $373.3 billion according to the 2016 Giving USA Annual Report.

Why do these numbers matter to you?

Interestingly, charitable giving as a percent of disposable income has stayed pretty much the same at approximately 2% over the past 40 years according to Giving USA. Yet the number of non-profit organizations has skyrocketed!

According to an article by Alex Daniels in The Chronicle of Philanthropy, from 2011-2013, the number of tax-exempt designations granted by the IRS was less than 50,000 per year. In 2014, the IRS introduced the 1023-EZ, a three-page electronic form that replaced the 26-page application. That year the IRS granted 501(c)(3) status to 94,365 organizations. In 2015, the number was 86,915. That’s over 200 each day!

The number of nonprofit organizations is skyrocketing!

Ken Stern in Charity For All says that, “…according to a Stanford University study, the IRS approved more than 99.5% of charitable applications. This statistic reveals the first troubling truth about our process for deciding what is a charity and what is not: we don’t have one. We permit almost anyone with a basic facility with government forms to start a charity.”

And then once a charity receives approval, it is almost impossible for them to have the designation rescinded. There’s no trigger mechanism for when a charity should be shut down.

This is concerning for a number of reasons. First, the shorter tax form may make it more difficult for the IRS to root out fraud from the outset. Additionally, the IRS does not have the staff to oversee the burgeoning number of nonprofits resulting in frighteningly low levels of oversight. An independent study by the Advisory Committee on Tax Exempt and Government Entities released in June of 2016 says that the IRS is “losing ground in its effort to regulate nonprofits”.

Lack of oversight in the nonprofit sector is a big problem.

Finally, with donations remaining relatively stable while the number of organizations balloons, the not-for-profit community finds itself struggling to attract the funding necessary to carry out its mission. As a result, management is required to spend more time on fund-raising than programming.

Even more concerning, dollars are being re-directed away from the most effective organizations to those that are ineffective and at times outright fraudulent. The reality is we need the non-profit community to perform efficiently and effectively. Our astronomical government debt means that we rely more and more on non-profits to deliver critical services.

We need to direct funding to the most effective nonprofit organizations.

So, how do we ensure that the more effective non-profits receive more funding than the less effective?

That’s where you come in. Join me next month to learn more!

© 2016