Philanthropy Front and Center-Atlanta

Back By Popular Demand: Webinars to Help Your Nonprofit Survive & Emerge Stronger

Now that we've lived through over a year of the economic downturn, you may be seeing the light at the end of tunnel in your nonprofit -- or maybe that light hasn't reached you yet and you're still in crisis mode. Regardless of your current position, you'll benefit from our new webinar training series, Turning Economic Crisis into Opportunity: How Nonprofits Can Survive and Emerge Stronger.

If this series sounds familiar, that's because we debuted it in October to a very positive response, so we've decided to repeat it. In the four sessions, you will learn to evaluate how well your organization uses resources to achieve its mission; apply the most effective short-term and medium-range strategies to ensure its survival; determine which revenue option is best; and implement the five essential characteristics of effective, sustainable nonprofits.

By understanding and strengthening your current financial health, you'll be prepared to make the most of economic recovery and secure your long-term sustainability. In addition, you'll develop skills that help you adapt to any economic climate.

Registration fee: $45 for each session.
Special offer: Register by November 30 for the complete four-part series for only $135...
YOU SAVE $45! Get four webinars for the price of three!

Click any title to get details and register.

• Special Offer: Complete Four-Part Series for $135
• Assessing Your Nonprofit's Financial Health, Tuesday, December 1
• Survival Strategies for Your Nonprofit, Thursday, December 3
• Strengthening Your Nonprofit's Income Portfolio, Tuesday, December 8
• Beyond the Recession: Building Sustainability, Thursday, December 10

Live from Challenges and Opportunities of the Economic Crisis - October 13

Download or view the slides from this presentation (PDF).

Bradford K. Smith, president of the Foundation Center, will provide his perspective on the impact of the economic crisis on the philanthropic sector – both foundations and service providers – and the challenges and opportunities these turbulent times present for the future.

This 60-minute program will be at the Foundation Center-Atlanta on Tuesday, Oct. 13, starting at 2:30 p.m. To read Mr. Smith's biography or sign up to attend, please see our Events Calendar.

Can't get to this event in person? Attend the program virtually via the window below, either during the program or after it's happened. This program also will be taped and posted to our web site later this month.

Giving in Installments

I saw an interesting article in our local paper, the AJC (Atlanta Journal-Constitution), about local charities allowing patrons to buy tickets to big-ticket special events on an installment plan:  "Charitable Giving Goes Layaway Route". The term "layaway" is not typically used; and those who buy tickets over time can expect discretion. According to Vicki Palefsky, chair of the Alliance Theatre's spring gala: "It preserves folks' dignity. It allows them the opportunity to give at a higher level than they might otherwise be able to, preserves the donor base, fills the house, and ensures that you'll reach your financial goals."

Have you had any experiences with creative ways you're handling special events?  Please let us know.  To learn more, check out our FAQ "Where can I find information on fundraising through special events?"

Joanne Kepics, Regional Training Coordinator, Foundation Center-Atlanta

Following the Money Trail: The Impact of the Economic Stimulus on Education in Georgia

If you’re wondering about the impact the economic stimulus will have on education funding in the state of Georgia, join us for this special education month program on Tuesday, June 30th at 2:30pm. Lauren Veasey, program officer, Southern Education Foundation will discuss the new federal stimulus law, the American Recovery and Reinvestment Act of 2009 (ARRA). This law offers Southern states an historic opportunity to improve public education from pre-school through college - especially for low-income students. ARRA allocates over $100 billion directly to the 15 states of the South for creating jobs and spurring economic renewal during the next two years, and more than one-third of these funds will go towards education. Reserve your seat and join the discussion.

For more information and resources for coping with the economic crisis, see our Focus on the Economic Crisis web page.

Also at our web page, Jamie P. Merisotis, president and CEO of the Lumina Foundation for Education, discusses the foundation's strategic, outcomes-based approach to expanding college access and success, particularly among low-income, minority, and other under-represented populations.  Listen!

Asia M. Hadley, Training Coordinator, Foundation Center-Atlanta

ARRA – Keeping Track

By now, you’re probably familiar with Recovery.gov, the federal government’s web site that provides the public with information about the American Recovery and Reinvestment Act (ARRA), including updates on how the money is being spent. There’s a new kid on the block – Recovery.org. This web site was recently established by Oniva, a Seattle company that collects data about purchasing by governments at all levels. At Recovery.org, you can view all of the active projects by state, county, and city. You can also track by type of project and cost. A couple of interesting features include (1) a glossary of terms and (2) an opportunity for the public to comment on each project. Check it out.

Also, in your search for ARRA info, don’t forget the Foundation Center’s Mapshot:  Best ARRA Funding Sources by State, which is a collection of the best resources on how nonprofits may be able to access stimulus funding. Just click on the state you’re interested in. 

If you are with a social service agency, I hope you are tracking the Strengthening Communities Fund, which is making $50 million in ARRA funding available to the communities most impacted by the economic downturn. The focus of this Fund is to build the capacity of nonprofits that are addressing various economic recovery issues, such as employment. 

Have you found any particularly helpful web sites about ARRA?  Has your organization applied for stimulus money?  We'd like to hear about it. Please share via the Comments section below.

Pattie Johnson, Director, Foundation Center – Atlanta

  

Metropolitan Atlanta Arts Fund Launches Arts Recovery Initiative

by Josh Phillipson

Arts organizations are continuing to have difficulty making ends meet across our region and the country, and while donors are digging deep to support human services and emergency assistance, the arts are seen as superfluous and not as important. The Community Foundation for Greater Atlanta believes arts are absolutely essential to a healthy community, which is why they created the  Metropolitan Atlanta Arts Fund in the first place back in 1992.

The Metropolitan Atlanta Arts Fund is a partnership between the Metro Atlanta Chamber of Commerce and The Community Foundation for Greater Atlanta providing support to small and midsized arts organizations in a 23-county region. Since 1993, the Arts Fund has funded more than $7 million in grants and management consulting awards to 84 arts organizations, creating more than 50 new staff positions in arts groups across the region.

To get more support directly in the hands of the arts community, the Arts Fund has launched the $2.5 million Atlanta Arts Recovery initiative to support small and midsized arts organizations with general operating support, management consulting and loans during the economic crisis. Initial funders include the Robert W. Woodruff Foundation, the Kendeda Fund, Zeist Foundation and Bank of America. The Arts Fund also announced its first round of 2009 grants in the region.

Expanding on the Arts Fund’s previous program of grantmaking, management consulting and loans to strengthen arts organizations, the Atlanta Arts Recovery initiative will include two grant cycles each year in 2009 and 2010 with each cycle distributing $500,000 in general operating support. Professional consulting projects through the Arts Stabilization Toolbox awards will help organizations implement scenario planning, update strategic plans, build stronger boards and improve financial plans. In addition, the Arts Loan Fund will increase the maximum size of loans from $25,000 to $40,000 and extend the timeframe that organizations have to pay back loans. The Arts Fund is encouraging arts organizations to consider implementation of new program or operating models that help them adapt to the new economic environment.

You can find more information about the initiative in a recent article in the Atlanta Journal/Constitution or at the Arts Fund web site.

Josh Phillipson is a program associate with the Metropolitan Atlanta Arts Fund.

Tips for Nonprofit Survival from Grassroots Fundraising Journal

I came across an interesting article recently in the March/April 2009 issue of Grassroots Fundraising Journal. In “5 Tips for Nonprofits to Survive & Thrive Now and into the Future” Kim Klein discusses briefly her thoughts on events leading up to the current economic downturn before giving her tips for nonprofit survival. In spite of the current situation, she feels that “…most nonprofits will survive and some will thrive in this next period.”

Klein feels that we are not in a “crisis”—which she defines as a situation with a definable beginning and ending (or at least easing of the situation) where everyone steps up their pace—staff and volunteers work longer hours, boards meet more often to decide what to do—knowing that the situation is temporary. Instead she views the current economic scene as “…how it is going to be for several years to come. It may get worse before it gets better, but more likely it will get worse and better, better and worse…”.

Her advice is to view these next months as exciting times and an opportunity to hone the organization’s mission, goals, donor base and volunteer pool. She lists five things that nonprofits need to do to raise money during these uncertain times:

• Acknowledge but don’t dwell on the economy in everything you send out. Remind donors that you are doing important work; they already know that these are difficult times.
• Donors are concerned about your financial decisions; let them know you are spending their money wisely.
• Focus on your mid-range donors (gifts of $100-$1,500).
• Look closely at your fundraising procedures. Correct any problems you find.
• List the 50 people most important to your organization and think about how you are going to interact with these people next: ask for a donation, ask for introductions to other donors, etc.

These are things that we as nonprofits should be doing all the time, but they are more important than ever now.

For more information about the effects of the economic downturn on nonprofits and fundraising, see our Focus on the Economic Crisis page.

Let us know your ideas for surviving the current economic situation.

Kayron Bearden, Reference Librarian, The Foundation Center-Atlanta 

Staying Legal in Tough Economic Times

By Rachel Epps Spears

Donations are down; requests for assistance are up.  Nonprofits that already operate on a lean budget are tightening the belt another notch or two.  Now is not the time to let down your guard when it comes to the legal health of your nonprofit.  Here are tips for keeping your organization out of legal trouble while you weather the economic downturn.

#1.  Don’t stop paying your taxes.

With decreased revenue, nonprofits sometimes fall into the trap of not paying employment taxes to the IRS.  Don’t do this!  The IRS won’t be moved by your charitable works; the Service wants its money.  Also, Board members should know that they can be held personally liable for a nonprofit’s failure to pay employment taxes.  As a related issue, make sure that any one you are treating as an independent contractor is correctly classified as such.  Follow the IRS guidelines or seek legal counsel to determine whether a worker is an independent contractor or an employee.  Make sure that you are properly withholding and paying employment taxes for anyone who should be treated as an employee.  See the IRS web site for more information.

#2.  Be careful when laying off employees.
 
When laying off employees, you must keep several things in mind to avoid future legal challenges to your decisions.  First, prepare a written layoff plan and carefully document layoff decisions.  This will help protect you from accusations that your decisions were made improperly.  Make sure that the business reason for the layoffs is clear and that the selection criteria for determining who is laid off is clearly defined so that you will have evidence if your decisions are later questioned.  Always remember that you cannot make termination decisions based on an employee’s race, national origin, sex, age, or any other characteristic protected law.  Also, before an employee is laid off, you must check if the employee has an employment agreement  and if there is an agreement, check for a certain period of service and for a severance payment.  Be aware that when you lay off an employee, he or she may be eligible for unemployment compensation.  It is important that you consult legal counsel to assist in creating a layoff plan that will be compliant with various applicable laws.

#3.  Make sure you pay minimum wage and overtime as required.

As an alternative to layoffs, you might consider retaining your employees but reducing their compensation.  Any such compensation reduction program must comply with federal and state wage and hour laws.  If you decide to lower salaries, make sure that you are still paying at or above minimum wage.  Also, don’t slack off on paying overtime to non-exempt employees.  If you don’t know the difference between exempt and non-exempt employees or haven’t carefully considered this classification, seek help.  See the Department of Labor for more information.

 #4.  Keep up to date your insurance premiums.

Insurance is costly but you need it more than ever when times are tough.  Be sure to pay all premiums due on general liability, workers’ compensation, director’s and officer’s liability and any other insurance that is vital to your organization.

#5.  Keep the Board informed and engaged.

Make sure the Board of Directors is well aware of the financial challenges facing the nonprofit and be sure to give them time to respond to those challenges.  Board members should meet more frequently, if necessary, and stay on top of any potential problems.

#6.  Check your contractual obligations.

If a lease or contract (including an independent contractor agreement) becomes too expensive or unnecessary to your business and you want to terminate, be sure to read the termination clause first and understand what risk you face by ending the contract. There may be cancellation fees or other requirements. 

Also, don’t use funds from one contract or grant to cover shortfalls in operations or other less-funded programs without properly considering your obligations under the contract and taking any necessary steps.

#7.  Renegotiate outstanding debt.
 
If you have a mortgage or other type of loan and are having trouble keeping up with the payments, don’t avoid your lender.  Most lenders would rather renegotiate the debt than foreclose. Contact your lender and see what can be arranged.

#8. Be sure subcontractors are being paid.

If you are in the process of building or renovating, don’t get caught between your general contractor and any unpaid subcontractors.  Make certain that your general contractor signs a release that he has received payment to pay subcontractors and make sure he pays them. 

A subcontractor that does not get paid by the contractor can put a mechanic’s lien on the property to obtain his payment.  Mechanic’s liens increase during difficult economic times.   Make sure that you have evidence that the owner paid the contractor in order to protect your organization.

#9. Be careful about additional fundraising efforts.

Nonprofits look for new and innovative ways to raise money in a bad economy but be aware that there are many laws and regulations for fundraising.  For example, Georgia has strict gaming laws governing raffles, door prizes and bingo games.  The IRS has many regulations that affect fundraising, including rules about unrelated business taxable income (UBTI). 

The UBTI regulations may require organizations to pay tax on any income (including fundraising income) that is not directly related to their charitable mission.   Finally, if you decide to try to raise additional funds by hiring a professional fundraiser, make certain the agreement will not affect your tax-exempt status.

#10. To Merge or Not to Merge?

Combining forces with another organization may be the only way to survive an economic downturn.  Although it is important that your organization’s mission, programs and culture are sustained, you must consider that merger with another organization may be the key to surviving during a period of fierce competition for scarce resources.  Combined organizations are more likely to attract funding than each organization alone and also experience more efficiency in operations.  Attorneys can help with the many legal issues that arise in a merger.

Rachel Epps Spears is the Executive Director of Pro Bono Partnership of Atlanta, a nonprofit organization whose mission is to provide free legal services to other nonprofits.  Pro Bono Partnership of Atlanta matches eligible nonprofits with volunteer attorneys who can assist the organizations with legal issues related to corporate governance, tax-exempt status, employment, contracts and leases, trademark and copyright, and real estate.  In order to be eligible, the organization must be a Georgia nonprofit with 501(c)(3) status that provides direct services to low-income or disadvantaged individuals.  For more information, visit www.pbpatl.org. You can also listen to our interview with Rachel Spears about how nonprofits in Atlanta can qualify for free legal assistance to manage and grow their nonprofit organizations.

Let us know your tips for navigating these tough economic times. 

Insight on Nonprofit Mergers

Is your nonprofit considering merging with another organization to help weather the current economic crisis?

Then you may want to review a recent post by Clinton O'Brien on Frogloop, the blog from Care2. Titled Nonprofit Mergers and Alliances - Don't Try This at Home?, the post summarizes a discussion with Guidestar CEO Bob Ottenhoff and Network for Good CEO Bill Strathmann held in Washington, DC recently.

During the discussion, Strathmann talked about his own experiences when Network for Good merged with Groundspring in 2005. He noted, “Mergers are made for financial reasons but fail for people reasons” -- a view shared by other management experts.

The two speakers addressed issues that merging organizations may face, including "culture" clashes, difficulties in uniting different technologies, and the impact of layoffs. They also suggested that assistance from a third party, such as a charitable foundation, can help foster trust and cooperation -- and possibly provide bridge funding during the process.

A list of resources on the topic of nonprofit mergers and collaborations can be found on the Lodestar Foundation web site. We also found some interesting articles available online:

• The Reality Underneath the Buzz of Partnerships: The Potentials and Pitfalls of Partnering by Francie Ostrower. Stanford Social Innovation Review, Vol. 3 (Spring 2005)
• Merger Mania? National, Regional Groups Continue Negotiations to Join Forces by Don McNamara. Nonprofit Times, Vol. 19 (1 September 2005)
• Multi-Agency Planning: Working Together Just Makes Sense by Thomas McLaughlin. Nonprofit Times, Vol. 16 (1 December 2002)

You can find additional resources on nonprofit mergers and alliances in our library, including:

• The Nonprofit Mergers Workbook: The Leader's Guide to Considering, Negotiating, and Executing a Merger by David La Piana
• Forming Alliances: Working Together to Achieve Mutual Goals by Linda Hoskins and Emil Angelica
• Nonprofit Mergers: The Power of Successful Partnerships by Dan H. McCormick

To locate more resources on this topic, search the Foundation Center's Catalog of Nonprofit Literature; you could start by searching on "Nonprofit organizations--mergers" in the subject field.

Originally posted by Katrina Brown, Foundation Center, Washington, DC

Helping Nonprofits Through Economic Tough Times

Although much has been written in our partner blog, PhilanTopic, about the Council on Foundations conference held recently in Atlanta , I attended one session that I thought you would be interested in hearing about.  The following summary comes from the COF blog and is written by Kaberi Banerjee Murthy, a board member of Resource Generation.

"Helping Non Profits Through Economic Tough Times” was an interactive session focused on the real issues that funders are facing at this time. Understanding that organizations may shrink or grow in response to the economic crisis, this panel provided concrete examples of what funders, boards and organizations can do to help strengthen an organization and its work. The themes of providing general operating support, capacity building, financial sustainability and advocacy were not new, but the conversation between the panel and the audience provided specific examples that illustrated the issue. 

Ron McKinley (Fieldstone Alliance) and Karen Whalen (Kellogg Foundation) provided tools and shared best practices with the group. Specifically, they highlighted examples of how organizations can scale back thoughtfully instead of making cuts of across-the-board, focus on the reliability of funding sources instead of the diversity of funding streams, provide general operating support while still ensuring accountability, and provide net grants that cover the total true cost of the administrative cost and reporting requirements.

Gayle Williams (Babcock Foundation) warned us that there is “threat even in the opportunity” of this current moment. She predicted that the economic downturn will test the economic infrastructure that has been built, and the influx of stimulus dollars may test it further. She challenged us to think about how we can help organizations who are poised to grow with federal money “that is going to hit them like a Mack truck.” One of the things that I was most impressed by was that she candidly addressed the race dynamics present in the flow of federal dollars, sharing that in her funding area, “the white power structure is not pleased that the dollars are flowing to organizations being led by people of color.” She reminded us that we need to help these organizations meet the higher level of scrutiny that they may face.

While Dione Alexander (Nonprofit Finance Fund) reminded us that “this too shall pass,” she also cautioned us that the goal is not simply to help a grantee “get through” the recession. If so, she said, “you have done them a disservice. You need to come out of the recession different and stronger. This is the new normal.”

You can always check our Focus on the Economic Crisis page to get news, podcasts, commentary, and advice for nonprofits today. And let us know how your work is going; we’d love to hear from you.

Joanne Kepics, Regional Training Coordinator, Foundation Center-Atlanta