Ask A Nonprofit Specialist - Engaging the Board in Financial Reports

posted by

Anne Byrne,

Professional-in-Residence,

ASU Lodestar Center

Question:
This question was recently posed to the ASU Lodestar Center’s “Ask a Nonprofit Specialist”:

Every time the financial report is made at my organization’s Board meeting, the members seem to either fixate on a number that is not especially meaningful or the opposite:  their eyes glaze over in boredom.  How can I make the reports more meaningful?  One member suggested we use a dashboard to report our finances?  What do you suggest?

Engaging members of a nonprofit Board of Directors in the organization’s financial affairs can be challenging, given the diverse skills and expertise Board members bring to the work. This Board member’s experience is very common. It’s not easy to report on financial statements in an engaging fashion. However, since financial accountability is one of the most significant legal and ethical responsibilities for nonprofit Boards of Directors, effectively engaging the Board in financial matters is critical.  Consider the following background information to improve your organization’s financial reporting and the Board’s engagement in your organization’s financial affairs.

Research Friday: Human Capital Performance Bonds. What are they? How do they work?

posted by
Patsy Kraeger, Ph.D.

Welcome to Research Friday! As part of a continuing series, we invite a nonprofit scholar, student, or professional to highlight current research reports or studies and discuss how they can inform and improve day-to-day nonprofit practice.

The past decade has been rife with ideas on how to scale up successful nonprofit organizations. Calls for scaling have been amplified by the recent economic recession, which brought increased demand for social services coupled with shrinking government dollars. But a structural problem remains: philanthropy does not typically have available capital for scaling.

The Social Impact Bond (SIB), developed in the U.K., was recently adopted in Massachusetts. The SIB is not a traditional bond; rather, it is a capital equity investment pool.ⁱ As I discussed in my last blog post, with SIBs, money is paid up front to a nonprofit organization, which in return commits to predetermined benchmarks. The investors assume the risk that the nonprofit organization will meet the benchmarks and alleviate the social problem.

Nonprofits As Trusted Messengers During This Election Year

posted by
Timothy J. Schmaltz,
ASU Lodestar Center
NMI Instructor /
PAFCO Coordinator
Protecting Arizona's
Family Coalition

Nonprofits have a unique character in our society. And it is not just their legal status. This legal status recognizes that nonprofits exist for more than a bottom line. Nonprofits exist for the community.

Most nonprofits don’t think of themselves as a political organization. Yet, nonprofits by their nature are an integral part of any community’s life. Nonprofits fight poverty, provide great venues for art and music, challenge homelessness, help organize civic life, promote the common good and a host of other functions that puts human community and the common good before profits and a narrow band of investors.

Nonprofits have distinctive characteristics such as: focus on mission and community benefit, the work as a calling, a unique satisfaction while making a difference over making money, loyalty and relationships which can create a unique sense of community and cohesiveness among staff, board and volunteers. These special attributes provide a new fertile ground for empowering people being served as a source of great political power.

Research Friday: Legal Structure Alternatives to Lead Social Change

posted by
 Karina Lungo,
Research Aide,
ASU Lodestar Center

Welcome to Research Friday! As part of a continuing series, we invite a nonprofit scholar, student, or professional to highlight current research reports or studies and discuss how they can inform and improve day-to-day nonprofit practice.

Do you have passion for social good and want to step out and lead it? Or maybe you have a great idea to create your own business, but want to balance making a profit with creating social impact?

Let’s face it, sometimes we struggle between our commitment to helping society and our personal needs for monetary income. In the finance class of the MNpS program at ASU, we were introduced to a fascinating article by Jim Fruchterman: For Love or Lucre. He suggests that all social entrepreneurs should balance the following four factors when deciding on a legal structure for their venture:

1. Motivation: how strong is our motivation for a social mission vs. making a profit?
2. Market: who are the customers we want to serve, and what is the competition?
3. Capital: how much money do we need to get the venture started and keep it going, and how important are tax considerations?
4. Control: how much control and decision power do we want to have in our enterprise? Are we willing to share it with the community, a board, investors, or partners?

The Nonprofits That Rule Social Media & The Web

posted by
Craig Van Korlaar, CNP,
Consultant and Project Manager
Create Etc.

A while back, you might remember seeing a beautiful infographic about the social media practices of the top 50 nonprofits. When I first came across it, I was really excited. Upon closer inspection, I noticed that these were not ranked in terms of social media use, but rather based on net income. This is absolutely a valuable metric, but I was curious how this data might vary if the list was based on organizations with the strongest social media presence...the ones we stand to learn the most from.

When I could not find up to date lists containing this type of information, I figured the first step would be to gather it myself. Here is a taste of five different lists I have built over the past few months. For a legend explaining how the rankings are computed, scroll down past the lists.

Top 10 Organizations in Terms of Facebook Likes

1. Invisible Children (Shot from 26th to 1st in under 2 weeks after release of the Kony 2012 video)
2. National Public Radio
3. WikiLeaks
4. TEDTalks
5. United States Olympic Committee
6. UNICEF
7. Livestrong
8. PETA
9. (RED)
10. Humane Society of the United States

View all 50 top nonprofits on Facebook (including logos & like buttons)  

Research Friday: Paying Volunteers A Stipend: Does It Work?

posted by
 Carlton Yoshioka, Ph.D.,
Professor and Director
of Academic Programs
ASU Lodestar Center

Welcome to Research Friday! As part of a continuing series, we invite a nonprofit scholar, student, or professional to highlight current research reports or studies and discuss how they can inform and improve day-to-day nonprofit practice.

Most researchers agree that low-income earners volunteer less (Wilson, 2012) and Pho (2008) extended this finding to include medium-wage earners. A related research question is the impact or positive incentive of volunteer stipends among low-wage earners (McBride, Gonzales, Morrow-Howell, & McCrary, 2011). Does the incentive of monetary support influence how people allocate their altruistic desires to help others? Is there a positive result for organizations that provide stipends for volunteers?

In March of this year, The Virginia G. Piper Trust funded an expansion of the Encore Fellowships program that originated in California. Experience Matters is a nonprofit organization that capitalizes on the time and talent of older adults (age 50+), who are seeking paid or unpaid positions that apply their skills to social purposes. According to Nora Hannah, CEO of Experience Matters, the Piper Trust support will allow Experience Matters to place adult volunteers with nonprofit organizations that are typically unable to afford this level of talent.

How To Rekindle The Passion You Once Had For Your Job

posted by
Mary Kaech, 
Project Assistant and Writer, 
 at Food for the Hungry

Working in the fundraising office of an international nonprofit can sometimes be a bit of a soul-killing experience. "The field" is hundreds or thousands of miles away, and it's hard for me to see that I’m "making a difference" when sitting behind a computer all day. This is why I’m grateful for our office volunteers.

For one thing, they’re just fun. We have volunteers of all ages, races, and walks of life. We have home-schooled kids and recovering addicts. Peter: a former mechanic who rarely smiles but keeps coming back, week after week, and Lorraine: a well-dressed socialite who buys every employee in our department a present on her birthday. I love getting to know them personally while hosting them in our office, and their attitudes remind me that my job is a privilege.

Volunteers walk in the door exuding that bushy-tailed enthusiasm I had as an intern. They’re sacrificial, hard-working, and grateful for the chance to serve. To the cause of fighting extreme poverty, they freely give their time— time they cannot get back— and to me, they give encouragement and the occasional kick in the pants. Their service reminds me that beyond just being thankful for my paycheck (so many of our volunteers are unemployed), I should be thankful to work in a place that allows me to exercise my beliefs and help others improve their circumstances— even if I may never meet those people.

If you need a reminder that your job is a gift and a responsibility, find yourself a volunteer or two. Shouldn’t we all work for our various causes with the ardor of those who are willing to work for free?

Mary Kaech is a native Arizonan who longs to see oppressed, marginalized people reach their full potential. She works full-time at an international nonprofit and loves volunteering with some of Phoenix’s 10,000+ refugees. In her spare time, she hangs out with her husband and friends, often feasting on wings and beer.

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Like this article? Get another! Click here to read Laura L. Bush's "Reflections of a Nonprofit Heart"

Research Friday: Generosity Expanded: The Impact!

posted by
Pat Lewis,
Senior Professional
in Residence
ASU Lodestar Center

Welcome to Research Friday! As part of a continuing weekly series, each Friday we invite a nonprofit scholar, student, or professional to highlight current research reports or studies and discuss how they can inform and improve day-to-day nonprofit practice.

Each year, through the publication of Giving USA, we learn about the generosity of Americans. In 2010, we gave nearly $300 billion in support of a wide variety of charitable causes—3.8 percent increase over the prior year. Almost all of this was given to causes within the United States. However, the 5 percent given to international causes reflected a 15.3 percent increase over the prior year, and was the largest percentage of growth among recipient areas. This level of increased global philanthropy is worth a further look. The Hudson Institute’s Center for Global Prosperity recently published its Annual Index of Global Philanthropy and Remittances for 2010 and reported “financial flows to the developing world from the United States increased notably in 2010 to $326.4 billion from $226.2 billion in 2009,”¹ largely due to the improved economy. This support consists of four sources: U.S. government aid, capital investment, philanthropy and remittances. Accompanying the Annual Index is an Executive Summary. Both papers serve as resources for this blog post, which touches on only a few aspects of this global generosity. Data such as that presented in this annual study is important to track as we learn of the impact of investments such as these.

Is Cause Marketing Real Advocacy or Consumer Apathy at its Finest?

posted by
Audra Buras, 
Grants and Outreach Specialist, 
 Program for Torture Victims

In the world of nonprofit sponsorship, it’s no secret that cause marketing has rapidly become the most popular method for nonprofits and businesses to simultaneously make money. A lot of money.

According to a recent study, 90% of Americans want companies to tell them the ways they are supporting causes. And 83% of these consumers say that they wish brands would support causes.

Arguably, cause marketing is becoming something of a social movement.

I have seen my fair share of nonprofit marketing: the good, the bad, and the outrageous. My nonprofit experience runs the gamut from granting sick kid’s wishes, to helping torture survivors from around the world and even fundraising for first-class symphony orchestras. (Some days I question whether or not I might be a nonprofit junkie. All signs point to yes.)