the donors forum blog

state budget preview: further cuts to safety net on the horizon

Illinois' economic vitality and the strength of our communities depend on a well-managed and well-maintained network of nonprofit services. While the details of Governor Quinn's fiscal year 2013 budget won't be released until his budget address on February 22, an analysis from Voices for Illinois Children's Fiscal Policy Center estimates that cuts to human services represents 60 percent of the Governor’s total cuts of $574 million. These cuts are being justified as a necessary response to weak projected revenue growth and skyrocketing pension liabilities.These cuts will likely add an extraordinary burden to the already hollowed out social safety net. 

The analysis projects that human services (including funding for the Department of Human Services, Department of Children and Family Services, Department on Aging, and several smaller agencies) will bear the brunt of the state’s total budget cuts. The $350 million reduction translates into programmatic cuts of about 10 percent (excluding programs funded by Medicaid dollars); these eliminations are on top of FY12’s 12.8 percent reduction in programs and operations. To see this from a long-term perspective, from FY09 to FY12 addiction treatment was reduced by 69%; youth services by 41%; and mental health grants by 36%. 

While cuts may be inevitable in order for Illinois to get back on track, Donors Forum will be in Springfield on February 22 for the Governor’s budget address and will continue to advocate for a budget that reflects the will of the people of Illinois and best serves our sector and our communities.

~Hannah White, Public Policy Coordinator

 image source via wikimedia commons

"community of practice" to focus on solving the nonprofit overhead challenge

Donors Forum’s second "Community of Practice" focused on Solving the Nonprofit Overhead Challenge launched on January 25, 2012 with leaders from 26 grantmaking and nonprofit organizations participating. The group discovered that in total they had worked in the sector for over 576 years! Combined they bring a significant amount of on-the-ground experience working in nonprofit and funder organizations, and dealing with the challenges around the issue of nonprofit overhead – which will serve to inform this important conversation this year.

Helping to frame the launch of the Community of Practice were two national experts on the topic:

Ann Goggins Gregory (left) from Bridgespan and Kathleen Enright (right) from Grantmakers for Effective Organizations. Ann and Kathleen shared the research on overhead in the sector and talked about “the nonprofit starvation cycle” that nonprofits often find themselves in as they respond to funders’ demands and pressures to conform. The group also discussed the “burning platform” that exists and motivates them to make change here in Illinois on this important issue.

We're excited to welcome the Overhead Community of Practice group and to see the dialogue and change that develops from their community this year. 

Find more on the other Community of Practice Donors Forum is sponsoring – its title is Streamlining Grantmaking – here.

 

~Robin Berkson, Senior Vice President, Member Relations 

and Laura Zumdahl, Vice President, Nonprofit Services

 

The Brinson Foundation  and the Eleanor Petersen Fund for Donor-Donee Relationships provided partial funding for the Communities of Practice.

     

Image 1: Solving the Nonprofit Overhead Challenge inaugural meeting, January 25, 2012

Image 2:   Ann Goggins Gregory (left) and Kathleen Enright (right) presented at the meeting.

author series: jeanne gang on the chicago river -- join us on feb 6

MacArthur Fellow, architect, and urban planner Jeanne Gang designs with a fondness for wildlife. Her work includes such nature-inspired buildings as the tortoise-inspired boardwalk at Lincoln Park Zoo, and Starlight Theater in Rockford, IL, the roof of which opens like a flower.

She is perhaps best known for her 82-story Aqua building in the city's "New East Side"-- her next big idea reflected in its oscillating windows: the Chicago River

 In her new book, "Reverse Effect," Gang effectively proposes undoing the 19th century engineering feat that changed the flow of the Chicago river from east to west.  Gang's idea began as a solution for the Asian carp problem, but soon opened up new possibilities for improving the quality of life in the city.

As part of her plan, Gang proposes building a barrier that would separate watersheds back to their natural state, creating an opportunity to reclaim the surrounding, long-abandoned industrial land for redevelopment, as well as provide potential for recreational water access. Gang's innovative plan involves manipulating the landscape in a way that would put nature right in the middle of the city amidst inescapable urban sprawl. 

While the idea of reversing the Chicago River is not new: Gang's broad, holistic approach makes it stand out as a realistic plan to unlock the potential of the area's waterways. The plan includes solutions for everything from more efficient water treatment and introducing green infrastructure to keeping our basements drier. 

Donors Forum is pleased to host Jeanne Gang for the second event in its Author Series, a new opportunity for connecting grantmakers, nonprofits, and advisors with each other and national experts. Event details are as follows.

When: Feb. 6
Time: 5:00 pm - 6:30 pm
Where: Access Living, 115 W. Chicago Ave, Chicago
Fees: $30 for Forum Partners, Members, and Associate Members; $45 standard fee
Registration: Register here

 ~Kathleen Murphy, on behalf of Donors Forum 

illinois grantmakers + nonprofits come together for a unique "community of practice" on streamlining grantmaking at donors forum

Donors Forum’s new "Community of Practice" on Streamlining the Grant Process kicked off January 18 with an enthusiastic group of 30 leaders from Member and Forum Partner organizations, and Associate Members from the Chicagoland area. Participants began a journey focused on finding mutual understanding and fostering working together as grantors and grantees to find solutions to streamlining the grant process in the sector.

The Community will meet multiple times throughout 2012 to learn from one another. The session on January 18 was spent getting to know the Community members and hearing from national streamlining expert Jessica Bearman about the work that has already been done by Project Streamline and others in the sector up until this point. Jessica spoke about the importance of streamlining for both grantors and grantees and where opportunities exist for change. She encouraged participants to spend 2012 “putting on their streamlining hats” as they tackle this challenging problem.

 A huge welcome to the Streamlining Community of Practice members! We’re excited to see the conversations and change your Community develops this year.

~Robin Berkson, Senior Vice President, Member Relations 

and Laura Zumdahl, Vice President, Nonprofit Services

 

The Brinson Foundation and the Eleanor Peterson Fund for Donor-Donee Relationships provided partial funding for the Communities of Practice. 

        

 

Image: Donors Forum's Streamlining the Grant Process "Community of Practice" first meeting, January 18, 2012

donors forum calls new water fees a hidden tax

As new water fees in Mayor Emanuel’s 2012 budget take effect this month, Donors Forum is concerned for the hundreds of Chicago nonprofits who will be hit with a new bill they can ill afford – one that might also represent a hidden tax on the nonprofit community.

“Nonprofits should pay their bills every day, like other organizations. That’s not the source of our concern,” says Valerie Lies, President and CEO of Donors Forum. “However, fees that are used to provide revenue for operations outside of water infrastructure are a tax and the City is asking tax-exempt churches, schools, hospitals, and community organizations to pay it.”

The City’s 2012 budget overview proposes a 70% increase in water usage fees over the next 4 years for homeowners, as well as a removal of the water subsidy for nonprofits, in order to upgrade the City’s aging water infrastructure. Water fees are projected to contribute most of the revenue for the City’s Water Fund which supports the City’s operation, maintenance, and capital costs of the water and sewer system.

A closer look at the budget, however, shows at least 20% or $220 million would cover other City expenses. An analysis by Illinois PIRG (Illinois Public Interest Research Group) has found the revenues generated by new water fees will fund other government operations:

• $260 million: Fund annual operations in the water department
• $250 million: Water infrastructure
• $93 million: Set aside funds to cover unanticipated capital cost overruns
• $220 million: Other city expenses, including:
  • $150 million: Employee health and pension benefits and other unspecified “municipal services”
  • $41 million: Department of Fleet Management and Facilities Management
  • $2 million: Inspector General’s office
  • $8 million: Department of Finance to pay for “professional and technical services,”       

postage, and the rental and maintenance of computer equipment

• $5 million: Department of Innovation and Technology for “contractual services”

“Mayor Emanuel’s budget avoids many of the budget gimmicks that had become common-place, like last minute asset lease deals and raiding the rainy day fund,” said Brian Imus, State Director for Illinois PIRG. “Unfortunately, the proposed water hike is an all-too-familiar accounting trick that hides the true cost of the budget to Chicago taxpayers.”

The water fee is also a red flag for nonprofits worried about threats to their tax exempt status. The Inspector General’s 2010 report recommended removing nonprofit exemptions for water usage and sewage fees, estimating that removing the nonprofit fee waiver could provide up to $15.2 million in revenue for the City. The Emanuel administration has taken that recommendation to heart and is in the process of revoking all other fee waivers.

Laurel O’Sullivan, Vice President of Public Policy at Donors Forum, also argued for nonprofit parity. “If the City is going to make water fee discounts available to organizations who can demonstrate they provide a disproportionate size of charity care, community-based nonprofits should be eligible for the 20% discount on their water bills, as well.”

“Most Chicago nonprofits deliver basic needs to every neighborhood in the city. This is how community based nonprofits earn their tax-exemption – by providing goods and services on behalf of the public good without a profit motive. To tax these organizations is unfair and bad practice,” she said.

~Delia Coleman, Director, Public Policy

 Image: The Chicago River, via creative commons.

guest post: jan masaoka on the nonprofit's guide to human resources

 I once served on the board of a group whose executive director adamantly insisted that managing staff was her responsibility, not the board's. We stayed hands off until we started to hear rumors of favoritism. After we prevailed in a battle with her about getting a listing of staff pay, we were shocked to discover that her assistant was paid $20,000 more than the program director and nearly as much as the development director.  A lesson - actually several lessons - learned.

The role of the board of directors in personnel or human resource administration is frequently a sticky issue for nonprofits. Should the board approve all salaries, or just the executive director's? If a staff member has a grievance, should it come to the board? How can the board's finance committee members, for example, be helpful in hiring accounting staff, but not usurp the hiring role of the executive staff? How can a board member appropriately give feedback to the executive director on the behavior of a staff person?

Boards tend to be at one extreme or another: some insist on approving every raise for every staff member, while others never see a salary report. This article proposes specific guidelines for board oversight that don't take away from the chief executive's authority or responsibility. The board can approve various policies such as salary ranges while not interfering with the staff's ability to manage. However the board structures its oversight, it needs a formal process to exercise that oversight. These guides provide such a process, and follow the principle that the board as a whole governs the organization, while individual board members can be helpful advisors to staff.

Guidelines for the Board's Role in Human Resource Administration

1. Committee(s): The board establishes a board-staff committee that works with matters related to paid staff. Only board members have votes on the committee. This committee makes recommendations to the board for approval (rather than deciding matters on its own). Following are the areas for this committee's scope of examination.

2. Personnel policies and employee manual: The executive director is responsible for ensuring that personnel policies and procedures are disseminated and implemented, and that the policies are reviewed as appropriate by the board. Individual members of the human resources committee may be able to bring their human resources expertise to make suggestions. Every two years or so, the human resources committee (or a task force) reviews the policies with staff and, if appropriate, drafts changes or a complete revision.

3. Salary scales: The executive staff draft a rate schedule (salary ranges for each position or category) of salaries, which is reviewed by the human resources committee or task force. This ensures that the board has considered the strategic matters related to salaries: whether the schedule is in line with the organization's values, whether there is appropriate internal equity or differences among positions and departments, whether specific positions are appropriately placed on the scale, whether compensation is in line with that at similar organizations, and/or whether the compensation supports (rather than hinders) the organization's ability to recruit qualified staff.

The salary schedule is sent by the committee or task force to the whole board for approval. In this way, the executive staff are still responsible for salaries, but the range of salaries is one approved by the board.

4. Salary scale compliance: Once a year, the human resources committee or task force reviews the specific salaries of the staff (by name and position) against the salary schedule, to ensure that no individuals are being paid outside the range for that person's position. The committee's job is to protect against favoritism and ensure compliance with the salary schedule, NOT to review whether any specific individual deserves a particular salary.

5. Benefits: The benefits schedule - health insurance, long-term disability insurance, 401(k), and so forth - is reviewed annually as part of the budget process, with costs projected for the coming year. The human resources committee should review the benefits package at least every two years and suggest changes (additions or subtractions), and their financial implications, to the executive director, the board's finance committee, or both.

6. Hiring: In some cases, at the request of the executive director, one or two board members may help with hiring. A common example is the board treasurer helping to interview and select the chief financial officer (CFO) or accountant. It should be made clear to everyone involved that the final decision is made by the staff person to whom the new hire would report. In these situations individual board members are acting as advisors to staff.

7. Diversity: If an organization has established goals or principles regarding a staff that is diverse in race, ethnicity, gender, age, disability, or other characteristics such as client status, there will be an HR role to play in implementing the policies and goals. A board-staff diversity committee, or the board or board-staff HR committee, can assist with making sure that recruitment efforts reach out effectively (for example, through the ethnic press), be on the alert for indicators of weak management of a diverse workforce (such as a string of resignations from Latina nurses), and with monitoring progress towards goals.

8. Layoffs: A management decision to lay off staff usually reflects a financial situation that should already have been shared with the board. In this context, the steps that management is taking to deal with that financial situation -- whether layoffs, paycuts, new income strategies, or others -- should be discussed with the board and the board should bless or put a hold on management actions. Although in most staffed organizations the decision of who to lay off and when and how are management decisions, it's critical for the board and management to be in sync about how the organization is responding to financial problems.

9. Grievances: Grievances on the part of employees must first go through the written procedures outlined in the employee policies manual. If an individual has exhausted the grievance process and that process has been documented, individual employees may be permitted (if it is so written in the policies) to raise a grievance to either the board chair or the board's human resources committee, which then acts as the final arbiter. This may be especially appropriate where the complaining employee reports to the executive director and has an unresolved complaint about the executive director.

10. Serious charges about the organization's management: Sometimes a staff member has a serious charge against management, such as the illegal or improper use of funds, sexual harassment, discriminatory behavior, or improper accounting methods that cannot be taken up in the grievance process. To provide an outlet for such matters (other than a complaint to the state attorney general), some organizations allow staff members to raise such concerns with the board chair. When other board members hear such complaints, they have a responsibility to direct the staff person to the board chair. By making the board chair the sole recipient of such charges, the board can prevent a disgruntled staff member from trying to develop allies on the board against the executive staff,  and can provide a way to bring an organizational matter to the attention of the board as a whole.

Delegating Personnel Work

The board can choose how to delegate personnel-related work. The most common choices are:

• a standing (permanent) human resources committee,
• a human resources task force (that is, a temporary committee),
• a board-staff standing committee, or a
• board-staff task force.

 

Committee members might include the staff human resources director (if there is one) or executive director, and/or non-board volunteers such as a human resources attorney. (Note that if non-board individuals are members of the committee, either they should be as non-voting advisory members of the committee, or the committee's recommendations should come back to the board for approval.) In some cases, the human resources committee is also responsible for developing plans and strategies for appropriate recruitment and utilization of volunteers, while in other organizations the human resources committee looks only at paid personnel.

Each organization will want to choose its own guidelines on these sensitive and important issues. Striking the right balance between board and ED authority may initially be challenging, but it's far from impossible. In the end, sorting this out will strengthen your organization while making life easier for board members and staff.

Jan Masaoka is the author of The Nonprofit’s Guide to Human Resources.   This article is a condensed version from chapter 8, The Board’s Role in HR.  The book is available for sale at www.nolo.com or www.amazon.com. This article originally appeared in Blue Avocado (www.blueavocado.org). Jan is the founder and editor-in-chief of Blue Avocado, an influential online nonprofit magazine with a remarkable 63,000 subscribers. In January 2012, Jan became executive director of the California Association of Nonprofits.

 

less than two percent of individuals’ income in illinois goes to nonprofits: key findings about individual giving in illinois

Nationwide individuals’ charitable giving is by far the largest source of private contributions to nonprofits: in 2010 individuals’ giving accounted for 81% of all private donations, totaling $211 billion. 8% of these donations are from bequests with the remaining 73% from individuals, according to the Giving USA 2011 report that incorporates data from the IRS, issued in June.

Individual giving decreases by almost $650 million 

In Illinois individuals gave almost $6.5 billion in 2009, the fifth highest of all the states in the country in real dollars. Despite the magnitude of that sum, individual giving has continued to decline slightly in recent years. According to the IRS, in 2009 individual giving decreased by $649 million from the previous year and is down over $1 billion since 2007.

Percentage of Illinois Households Giving

Despite the almost $6.5 billion donated in 2009, only 27.7% of Illinois households made a charitable contribution, ranking Illinois nineteenth in the country in percentage of households making contributions. 

The percentage of Illinois households giving fell by 0.8% in 2009 from the previous year and is down 3.4% from 2006.  

Average giving of Illinois households

 On average, Illinois households donated 1.85% of their adjusted gross income to charity. The national average is 2.02%, ranking Illinois 33rd in the country. The percentage of income donated by Illinois households has also decreased consistently from 2.1% in 2006. 

The average contribution per Illinois household was $3,904 (31st in U.S.), with the average contribution ranging from $1,181 for households making less than $50,000 to $14,790 for households making over $250,000.

  ~ Laura Zumdahl, Vice President, Nonprofit Services

as late payments pile up, policy - not politics - should govern

The General Assembly returns to Springfield this week for the fall legislative session. Governor Quinn laid out his top three priorities for this session: 1) sustaining his veto of a 'smart grid' energy system, 2) ending legislative scholarships, and 3) passing a revised gambling bill.  Noticeably absent is paying down the backlog of overdue bills.  
 
Illinois needs to make paying its bills a top priority. New analysis from the Illinois Partners for Human Services shows how human service providers continue to wait for more than $458 million owed to them by the state, forcing many to cut back on services and some to shut their doors altogether.  And too often, the decision of what organization gets paid first is a matter of politics.  Documents obtained by the Associated Press under the Freedom of Information Act detail how nonprofits backed by lawmakers are bumped to the top of the list.  The system lacks transparency and should be replaced by a policy of “first in first out.” 

 As overdue bills pile up, nonprofits across Illinois are struggling to make payroll, pay rent, and accommodate increasing demands for service.  For too long, nonprofits have had to rely on last minute pleas to lawmakers to expedite overdue payments.  Illinois should institute and abide by a “first in, first out” policy of paying bills based on when they come in – not who is asking for a favor.  The state should publish a list of delayed payments to service providers by agency, how much each is owed, and how long the bills are overdue. This would put an end to the clout-ridden process that pits nonprofits against one another in pursuit of dollars they are legally owed.

Illinois depends on the partnership of nonprofit organizations to provide the services government can’t.  By providing vital services, nonprofits ease the burden of government and help fulfull the social compact; but they cannot be expected to until the state comes up with a plan to eliminate the backlog of long-overdue bills and introduces a rational and fair payment process.

author series launches with jason saul on the end of fundraising

Jason Saul, author of The End of Fundraising, was featured at Donors Forum’s inaugural Author Series event on October 11.  Saul emphasized the importance of nonprofits raising money by showing how the outcomes they achieve relate to the goals of the businesses and consumers from whom they seek support. Non-financial returns of “doing good” do not give nonprofits much leverage, but it doesn’t need to be this way if we realize that social change has economic value.

Touching on concepts and techniques covered in more depth in his book, Saul offered several starting points for opening up a new dialogue about corporate-nonprofit partnerships:

• Capture, market, and sell your impact. We need effective methodology to measure and value outcomes.
• "It's not about you, it's about them." We in the independent sector need to understand who the stakeholders are that benefit from our impact.
• We can strengthen the sector by focusing on impact while providing economic value to businesses at the same time.

The talk was thought provoking and well received by an audience more than 120 nonprofit and foundation leaders. During a substantive question and answer segment, Saul offered additional specific examples and insights into connecting nonprofit outcomes to for-profit needs.

The event, sponsored in part by Kraft Foods, took in a space generously donated by the law firm Mayer Brown.  All attendees received a copy of The End of Fundraising. See event pictures on Donors Forum's Facebook page. Watch Donors Forum’s event page for future author events.

 

 

 

~Mary Penn, Communications and Development Consultant

brokering a constructive dialogue on the state budget

Members of the foundation and nonprofit community left a meeting last week with representatives from the Governor’s office and the General Assembly with a better understanding of how far the state has come with its Budgeting for Results project – and how far they have to go. Donors Forum assembled key members of the foundation and nonprofit community, national experts, and representatives from the Governor’s Office and the General Assembly at the MacArthur Foundation last week to address the challenges, opportunities, and impact BFR - the state's new approach to outcomes based budgeting - will have on the nonprofit community.

“Our goal with BFR is to be better stewards of the taxpayers’ dollars.  To get the highest return on investment for each dollar spent, we need to know what works for every program – and we need help.”  said John Kamis, Senior Advisor to the Governor, conveying the state’s vision and addressing the real challenges that lie ahead. He was joined by Senator Dan Kotowski, who shared his vision with the assembled group of a process that “takes the politics out of budgeting.  BFR represents historic change for Illinois that will require external partnership and support to aid with administrative and technical capacity given our ambitious timeframe.” 

While prioritizing funding for programs that can demonstrate effectiveness is a laudable goal, Layla Suleiman Gonzalez from the Illinois Department of Human Services reminded the group how much of a paradigm shift this is for Illinois. “DHS is committed to moving towards performance contracting, but we still have a ways to go.  Particularly in the human services field where results are not easily quantifiable, connecting funding to positive, demonstrable results is difficult.” 

But the difficulty of performance measurement offers an opportunity for foundations to enter the process. Gary VanLandingham, Director of the Results First project at The Pew Center on the States presented one way for foundations to help relieve some of the State’s burden.

“The foundation community is far ahead of government in results measurement,” he said. “For philanthropy, connecting funding to effectiveness is practically a no-brainer so it will be critical for foundations to lend their expertise and where possible, their financial support in that arena.”

Echoing VanLandingham, Tracie Hall from The Boeing Company urged the group to think creatively about how the foundation community and government could work together to “reduce administrative burdens on service providers by creating more seamless data collection and reporting systems.”

But John Bouman, from the Shriver Center, cautioned for discipline as these conversations continue.  He urged those gathered around the table to be mindful of the two very different areas where BFR will play out and address the unique issues each of those will demand on their own terms.  First, there is the decision making around agency allocations that will have very distinct winners and losers.  The other half of BFR will involve the evolving relationship between nonprofit service providers and the state agencies.  While related, Bouman suggested that these conversations should not be conflated.

 As BFR takes root in Illinois, the nonprofit and foundation community should be a part of the process.  Senator Heather Steans summarized these opportunities, which include:

• Nonprofits can attend and weigh in at the public Budgeting for Results Commission meetings or the Human Services Commission public hearings;
• Foundations can serve as a neutral bridge between state agencies and nonprofit service providers;
• Foundations can provide assistance to the state through support for infrastructure and technical capacity;
• Nonprofits and foundations can help spread the word.  Share insight and information with your own networks.

Moving forward with BFR, it is clear there are significant challenges in store but despite that, Donors Forum, with its nonprofit and foundation partners, will work with the state to inform a common strategy, communicate progress and challenges, and assist with leveraging available resources and expertise to ensure BFR works for Illinois.

Head over to the Donors Forum website for meeting notes and presentations from Senator Kotowksi and John Kamis.

donors forum calls for transparency and accountability in state budget

On Thursday, September 9, 2011 the Human Services Commission held a public hearing on Budgeting for Results (BFR) and the impact of the state budget crisis on the human services sector in Illinois.  As the state readies for the implementation of this new budgeting process that will have a significant impact on Illinois communities, we are advocating for accountability and inclusion of nonprofit and philanthropic stakeholders.

We were called to testify, and gave the state credit for its efforts to reform the budgeting system while urging caution, collaboration, and transparency.  If done right, BFR has the potential to restore some faith in Illinois leadership and elected officials. If done poorly, it could defund vital services due to lack of appropriate outcome measurement and further alienate whole constituencies, including nonprofits that provide critical services to the state and those they serve.  

We emphasized the need to focus on three key areas:

 1) A transparent and accountable system. For BFR to work well in Illinois, we must be a collaborative process for collecting, sharing, selecting, and analyzing data for the proper establishment of goals and outcomes in order for the State to meet its own targets. In addition, it is critical to get an explicit statement about which programs will be included and which will not. This will be enormously important for nonprofits determining how to engage in the process.

2) Inclusion of nonprofit and foundation community. Nonprofit and foundations expertise should be tapped. If BFR is to work well in Illinois, the process by which data is gathered, collated, and indicators and outcomes created needs to be open to subject matter experts, particulary from  the nonprofit and foundation communities. 

3) Realistic assessment and allocation of necessary resources. If BFR is to work in Illinois, ‘doing more with less’ cannot be the guiding principle. Lack of management, buy-in and staffing across and through departments will not only lead to bad resource allocation, it will lead to fundamental misreading of program goals and outcomes – resulting in less needs being met. If the state doesn’t have enough resources, it should tap the expertise of the nonprofit and foundation communities.

Read Laurel's full testimony here.

~Laurel O'Sullivan, Vice President, Public Policy

Photo credit: http://www.flickr.com/photos/rsutphin/4281439888/sizes/s/in/photostream/ via Creative Commons

 

bfr commission begins its work

The newly reated Budgeting for Results (BFR) Commission began its work last Friday on their charge to issue recommendations and guide the implementation process, and timeline, for Illinois’ new budgeting process. The Commission has three directives: 1) advise the governor on the state’s goals and outcomes; 2) propose a percentage of the budget to be allocated for the state’s goals and outcomes; and 3) review existing mandated expenditures. On November 1, the Commission will release its first report to the Governor, making final recommendations on outcomes, allocations and mandated spending. 

The Commission is a diverse group drawn from the private, public and charitable sectors, chaired by Illinois Sen. Dan Kotowski and includes John Bouman (Executive Director, Shriver National Center of Poverty Law) and Jim Lewis (Senior Program Officer, The Chicago Community Trust.) John Bouman serves on Donors Forum’s Board of Directors and is co-chair of the Public Policy Committee; Jim Lewis is a member of the Public Policy Committee.  Recognizing the need for community representation on the Commission, Donors Forum recommended and supported Mr. Bouman and Mr. Lewis’ appointments. Their expertise and high level perspective on the needs of the nonprofit sector will help ensure the Commission fulfills its obligations.

Members will be breaking into three groups over the next month to establish recommendations for: Outcomes, Allocations and Mandated Expenditures. On November 1, the Commission will release its first report to the Governor, making final recommendations on outcomes, allocations and mandated spending. 

The state has shown some early progress. The Governor’s Office of Management & Budget (GOMB) analysts have completed SMART training; sub-goals and logic models from all agencies have been submitted (with the Dept. of Human Services leading the way with best practices); finally, the State is in the process of reviewing consultancies interested in helping the State with its change management efforts.

However, challenges remain. The government acknowledged their timeline was aggressive, requiring the Commission to make its recommendations quickly; metrics have yet to be developed; stakeholder engagement and outreach continues to be difficult; and funding is a distinct need.

But despite these hurdles, Commissioners appeared eager to play an active and leading role in establishing BFR as a rational measuring stick for the state. The Commissioners asked difficult questions: How exactly will the state plan to address grassroots engagement? How can the Commission can make recommendations to put all revenue on the table, not just General Funds and particular special funds?   Echoing a Donors Forum concern, Commissioners questioned the feasibility of achieving their directives in the timeline provided, by November 2011. 

For further questions, and opportunities for philanthropy to become involved, please email Laurel O’Sullivan, Vice President Public Policy (laurelosullivan@donorsforum.org).

 ~Laurel O'Sullivan, Vice President, Public Policy

 image: http://www.google.com/imgres?q=state+of+illinois+seal&hl=en&sa=X&biw=1440&bih=785&tbm=isch&prmd=ivns&tbnid=0UyVpbdKoIRSJM:&imgrefurl=http://www.cyberdriveillinois.com/general/seal.html&docid=CFSceazxp7yeYM&w=254&h=252&ei=SlxWTrLxEpLksQLUoP24DA&zoom=1&iact=rc&dur=331&page=1&tbnh=140&tbnw=141&start=0&ndsp=29&ved=1t:429,r:0,s:0&tx=58&ty=61

nonprofits uneasy about debt deal

In Illinois and across the country, the jobs of nonprofits just got harder, as a result of the Aug. 1 bipartisan deal in the U.S. House of Representatives to reach a debt agreement.

“While it is always good to see legislative bipartisanship, we are more than a little worried about how this deal will affect the already-struggling nonprofit sector in Illinois,” said Laurel O’Sullivan, Donors Forum's Vice President of Public Policy. “This deal represents a withdrawal of government from the social compact that has historically provided care for all its citizens.”

And, as a result of Illinois' struggling finances, ongoing debt, and persistent deficits, the ability of Illinois' nonprofit sector to provide many of the services delivered on behalf of the state has grown shakier. 

After vetoing $376 million in spending approved by the Illinois General Assembly, the budget for FY 2012 stands at $32.99 billion and carries $8 billion of unpaid obligations to service providers into the new fiscal year. Deep -- and in many cases avoidable -- cuts to education, human services, and other areas translate into devastating community impact and serve as a call to action for the nonprofit sector, commented O’Sullivan.

“Right now, as a cost-cutting measure, the state is more interested in providing services that are covered by Medicaid because they represent much-needed federal dollars. While this deal proposes not to impact recipients but providers, it translates into Illinois providers having less incentive to provide care in Illinois,” O’Sullivan said. “So whether or not the deal was intended to impact our communities, the unintended consequence is that nonprofits that traditionally serve the most vulnerable will no longer be able to do so. We anticipate seeing the need increase exponentially as nonprofits decide it’s no longer feasible for them to operate in the state of Illinois.”

Currently, the Illinois nonprofit sector employs almost half a million people and provides nearly 10% of the state’s GDP.

-- Delia Coleman, Manager, Public Policy Communications and Outreach

Image: http://www.flickr.com/photos/dcjohn/2960356/sizes/m/in/photostream/ via Creative Commons

inspiring the next generation: the young leaders public interest seminar series

A panel of five philanthropy leaders shared their career insights and personal stories at the first 2011 seminar of the Young Leaders Public Interest Seminar Series, offered by The Illinois Campaign for Political Reform, a Donors Forum Partner. The audience was made up of summer interns from all over Chicago. The panelists, representing The Boeing Company, the MacArthur Foundation, the Mivka Challenge, the Robert R. McCormick Foundation, and the Woods Fund, had diverse backgrounds and each came to their career in philanthropy in different ways. In fact, a significant insight the group provided was that a career is almost never a linear path.

As the majority of panel members were from area foundations, many audience questions were about funding priorities, accountability, and evaluation. Several key points were made:

• Written strategy guides their giving, and they are accountable to that strategy.
• Foundations want to invest money in ways that are going to make a difference over time. They are not necessarily interested in short-term measurement of results.
• Funders may be more interested in evaluating an entire effort, rather than individual efforts.
• Philanthropy's role is to supplement, not replace, dollars that government is taking away.
• Philanthropic efforts that do not succeed are not failures. Organizations must take risks in attempt to help solve issues.
• Careers in philanthropy often involve long hours and large workloads. It is important to be committed to your cause and prepared to work overtime.
  

The group’s discussion about careers was especially inspiring. Panel members offered the following tips on what they look for in a resume:

• How are you engaged in the community? Are you on a board? Do you volunteer?
• Are you willing to take risks? Are you dedicated to philanthropy or a certain cause?
• Do you have experience in a broad range of things, and exposure to different audiences?
• Do you have direct service experience? Do you have previous experience in communications?
• Do you have interpersonal and organizational skills? Are you people-oriented?
  

Parting words were also offered: “Do the work that you’re passionate about;” and “Own what you know, but be curious.”

The Young Leaders Public Interest Seminar Series will continue every Wednesday through the end of July. A list of the upcoming sessions can be found here.

~Mary Penn and Lucy Williams, Communications and Development Volunteers

charitable giving show modest rise in 2010 after two years of declines

An excerpt from the press release on the latest Giving USA study, considered one of the most important sources on charitable giving in the country, is below. Download an executive summary here. Edith Falk, Chair of Giving USA, is quoted below; she is also a Donors Forum Board Member and President and CEO of Campbell & Company, a Forum Partner.

Giving USA Foundation and its research partner, the Center of Philanthropy at Indiana University, today announced that total charitable contributions from American  individuals, corporations and foundations were an estimated $290.89 billion in 2010, up  from a revised estimate of $280.30 billion for 2009. The 2010 estimate represents growth of 3.8 percent in current dollars and 2.1 percent in inflation-adjusted dollars.

Our revised estimates show that 2008 and 2009 saw the largest drops in giving in more than 40 years as a result of the Great Recession, exceeding previous recessions' impact on giving. Despite the fragile economy recovery, though, Americans continued--and even increased--their support of organizations and causes that matter to them in 2010. The $10.59 billion increase in the estimated total suggests that giving is beginning to recover as the economy slowly climbs out of the recession.

A recent press release said this:

Total giving grew by 2.1 percent last year after adjusting for inflation. That's good news following a combined drop of over 13 percent in 2008 and 2009," said Patrick M. Rooney, Ph.D., executive director of the Center on Philanthropy. "But the sobering reality is that many nonprofits are still hurting, and if giving continues to grow at that rate, it will take five or six more years just to return to the level of giving we saw before the Great Recession.                                                    

Campbell & Company, a Donors Forum Partner, has webinar slides, a podcast, and other resources on Giving USA here.

Arabella Advisors, whose principals are Donors Forum Associate Members, has a webinar on Giving USA here.

- Lucy Williams, Communications and Development Volunteer

irs revokes tax-exempt status for 13,000 illinois nonprofits

The Internal Revenue Service released a list of Illinois nonprofit agencies whose tax-exempt status was automatically revoked on Thursday.

The agencies were among 13,217 statewide.

This announcement of the revocations comes years after Congress imposed an annual filing requirement for all nonprofits and an automatic revocation penalty for those that failed to file a 990 for three years in a row. But this announcement may not, in itself, be a bad thing.

“We believe a majority of the organizations have gone out of business and failed to report it to the IRS, or their names or addresses have changed,” says Laurel O’Sullivan, Vice President of Public Policy at Donors Forum. “Even with three years of outreach from organizations like ours, the Attorney General’s Office and the IRS, this clearly speaks to the need for continued capacity building for small to mid-size nonprofits. If there are organizations on the list, Donors Forum can help them navigate the first steps in the process.”

While the IRS has established a process for nonprofit organizations whose tax exempt status have been automatically revoked to redress the issue, the process can be costly and the paperwork complicated to file, depending on the size of the organization.

The IRS will update the list every month.

Download our FAQ here.

National Council of Nonprofits has a revocation resource page here.

~Delia Coleman, Public Policy Manager, Communications/Outreach

photo credit: http://www.flickr.com/photos/nerdcoregirl/4335907588/lightbox/ via Creative Commons

 

save the date of weds. oct. 19 for vital signs -- the illinois nonprofit conference!

Network and learn with grantmaking and nonprofit colleagues, nationally known speakers, and Illinois luminaries about leadership, management, and advocacy strategies for the current economy.

Join Donors Forum and goodWORKSconnect.org for Vital Signs: Keeping Nonprofits Healthy in Uncertain Times.

It will be held at the Hilton Springfield, 700 East Adams Street, Springfield, Illinois.  Click here to reserve a room at a group rate of $109 per night using the code "Donors Forum" 

Check this event website for updates and follow the conference on Twitter using hashtag: #vitalsector

~Celeste Wroblewski, Donors Forum

it's all about succession planning: a preview of daring to lead 2011

Engaging, inspiring, and informative.

As a sector-switcher, I don’t represent the target audience for “Daring to Lead 2011,” a presentation offered by Donors Forum in May, but I found myself riveted by the presentations and panel discussion. What could have been dry statistics was transformed into a compelling, and at times humorous, presentation by Jeanne Bell, CEO of Compass Point.

Daring to Lead explored findings from a major survey of executive directors from around the country. In a nutshell, it is all about succession planning. But from my perspective, the event provided some key insights into the nonprofit sector and strategies for my own career trajectory.

First, the idea that there is going to be a huge vacuum in the nonprofit sector created by retiring baby boomers is, according to Bell, a false alarm. The data show that there are plenty of upper-level managers itching to become executive directors, and that only 34% of executives are 57 or older. Tom Adams (President of Transition Guides), who also gave a fascinating presentation, said we can expect the recent 10-12% turnover rate among executive directors to remain steady.

So the sector does not suffer from a lack of people, but a lack of transition planning. While this may be a little disappointing to job-hunters (like me) that were hoping for that job vacuum to open up, all is not lost. I learned that finding a mentor is a key step I can take right now. Moreover, when I begin interviewing for management positions, I know to be on the lookout for a few things:

• Do the board and executive director relate as trusted partners?
• Does the organization have a written succession plan and a clear organizational plan?
• Do executive level managers actively develop leaders in their organization?
• Will the organization create new job descriptions as employees grow and develop?
• Does the board support and develop executive leadership?

An effective board and an organization committed to leadership development are important not only to succession planning, but also to career planning for up-and-coming nonprofit leaders.

~Mary Penn, Communications and Development Volunteer

NO to new fees and taxes for nonprofits

As a significant economic engine in Illinois and Chicago, nonprofits contribute nearly 10% of state GDP and 10% of the workforce (with 70% of those employees working in Chicago); the nonprofit sector can't afford to lose its ability to operate under the additional burdens of new fees and taxes. But there's a more mission-oriented reason to protest these fees.

Without nonprofits, positive outcomes for education, health, economic stability, public safety, cultural literacy, and basic citizenship are harder to come by. Without nonprofits, our communities worsen. (In the long run, nonprofits are a bargain. See this new report on the specific socio-economic impact some nonprofit services have on our communities.)

Times are tough everywhere. But when calls for shared sacrifice (see the Chicago Sun-Times and the New York Times) specifically target nonprofits, it's time to reexamine whether we as a state and as a City can really afford such sacrifice. 

Here in Illinois, we are #1 in the country for late payment, #3 for contracts failing to cover the full cost of services, and #3 for contract terms changing in mid-stream -- all external pressures constraining the operating environment for nonprofits. Meanwhile, the demand for services from hundreds of thousands of people living in our communities continues to rise.

Across the country, local municipalities - including Chicago and municipalities in Illinois - are looking increasingly to nonprofits as a source of much-needed revenue. The National Council of Nonprofits has collected a sobering tally of attempts across the country of local governments asking nonprofits for Payments in Lieu of Taxes (PILOTS), water and utility usage fees, new property & sales taxes, and other new fees as a way to fill their gaping budget holes. Little by little, the social compact between the public and nonprofit erodes, to the potential detriment to the sector and our communities.

The issue isn't likely to disappear any time soon, so here's what to remember and repeat about new fees and taxes on nonprofits:

• In serving the common good, and easing the burden of government, nonprofits earn their tax exempt status everyday;
• They are a financial burden cash strapped nonprofits are currently unable to bear;
• They impair nonprofits' ability to provide critical services to thousands of people in local communities.

See how Donors Forum responded to the New York Times article here.

Look to Donors Forum as we keep an eye on this issue for you.

~Delia Coleman, Public Policy Manager, Communications & Outreach

photo credit: http://www.flickr.com/photos/nohodamon/3580748194/ via creative commons

donors forum report highlights nonprofits' contribution to the illinois economy

Donors Forum has released a new report, A Vital Force in Illinois: The Nonprofit Economy 2011, that shows that the nonprofit sector remains a key player in the state’s overall financial health. In Illinois, nonprofit organizations:

• Rival the state’s largest industries in size. The number of workers employed by nonprofits in Illinois exceeds the worldwide workforces of major corporate employers Boeing, Kraft, Abbott Labs, Sara Lee, and Motorola combinded, and is more than double the size of the entire construction and transportation, warehousing, and utilities industries' 2009 workforces.
• Account for ten percent of all private sector jobs.
• Contribute significantly to Illinois’ economy. 
• Have a positive multiplier effect on the economy. 
• Reduce state costs. 
• Generate $9.3 billion in volunteer time annually.

The report also suggests actions that the general public, lawmakers, foundation and corporate leaders, and nonprofit staff and board members should take to ensure that nonprofits continue to be a vital force in Illinois' economy.

A Vital Force was made possible in part by the Henrietta Lange Burk Fund, administered by Bank of America Merrill Lynch.

Read or download the full report, along with recommendations and implications, here.

~Alyse Bentz, Communications and Development Volunteer

telling the story of philanthropy and nonprofits: donors forum on the hill

In early March, a group of foundation leaders, advisors, and Donors Forum staff  travelled to Washington D.C. for the annual Foundations on the Hill conference and lobby day, co-sponsored by Council of Foundations and The Forum of Regional Associations of Grantmakers.  Over two whirlwind days, the Donors Forum team met with nearly all members of the Illinois Congressional delegation.  As with previous trips to the Hill, the two days  offered a unique opportunity to help  Congressional leaders understand the value and contributions of nonprofits and philanthropy in Illinois and, just as importantly, build relationships with new members of Congress.

It was also an opportunity to educate lawmakers on the current focus of Donors Forum ‘s public policy work: helping to solve the fiscal problems that affect the philanthropic and nonprofit community in Illinois. While the nonprofit community is directly affected by budget and policy decisions at the State level,  decisions made at the Federal level could have unintended consequences on nonprofit providers and the grantmakers who fund them; the necessity for more dialogue about the value of the sector, our concerns, and our solutions grows more urgent.

Key messages to members of Congress emphasized philanthropy as a critical repository of innovation, independence, and investment in communities in all legislative districts. Toward this end, the delegation shared examples of innovative projects that Donors Forum's Members support, such as the Bloomingdale Trail in Chicago, protecting the Great Lakes from Asian Carp, addressing food deserts, and the role of community foundations in encouraging local community philanthropy.

As more than one speaker said to grantmakers from all over the country, during the first day’s Legislative Update session, ‘If you’re not at the table, you’re on the menu.’

At the top of the policy agenda this year were several important legislative issues that affect the charitable sector.  Simplifying the private foundation excise tax became the lead “ask,”  but the delegation also asked lawmakers to:

 

• Make the IRA charitable rollover permanent
• Maintain current law on charitable deduction rates
• Support Program Related Investment (PRI) Act
•  Support Rural Philanthropy Growth Act

When asked about the possibility of comprehensive tax policy reform in this session, congressional staffers estimated that significant movement would probably not occur until 2013. Policy interests from congressional offices varied but one thing was clear: they wanted to hear more about philanthropy and nonprofits and how they affect their districts.

Communicating with legislslators about the value of the sector has already had a measurable impact. Following Foundations on the Hill, two pieces of legislation on the policy agenda were introduced in the Senate:

• Senators Chuck Schumer (D-NY) and Olympia Snowe (R-ME) introduced the Public Good IRA Charitable Rollover Act (S. 557) that would extend the IRA Charitable Rollover beyond 2011; broaden its scope to allow for gifts made to donor-advised funds, supporting organizations, and private foundations to benefit from the incentives; lift the $100,000 cap on distributions; and allow for planned gifts beginning at age 59 and a half.
• Senator Charles Schumer (D-NY) introduced a bill to simplify the excise tax.  The legislation (S. 593) would reduce the excise tax on investment income from 2 percent to 1.39 percent.

The Donors Forum team was made up of Bob Glaves, The Chicago Bar Foundation and Chair of the Donors Forum Board of Directors; Paul Botts, Gaylord & Dorothy Donnelley Foundation; Ed Miller, The Joyce Foundation;  Jim Parsons, The Brinson Foundation; Janice Rodgers, Quarles & Brady LLC; Dan Templin, DeKalb County Community Foundation; and Sylvia Zaldivar-Sykes, Lake County Community Foundation.

Donors Forum staff members who attended included Valerie S. Lies, President and CEO; Laurel O’Sullivan, Vice President , Public Policy; and Delia Coleman, Manager, Public Policy Communications/Outreach.

-- Delia Coleman, Public Policy Manager, Communications and Outreach

guest post + link to a free webinar: what the hewlett foundation learned about communications training for grantees

The way Eric Brown, communications director for the William and Flora Hewlett Foundation, tells it in a recent Communications Network webinar, it wasn't a sudden "Eureka moment" that sparked his desire to assess the effectiveness of the training programs his foundation had been offering for years to help grantees develop effective communications skills.

Instead, he was just simply itching to know if these programs were doing any good.  "It was bugging me because I didn't know," says Brown.

"For years," he says, "the foundation has sponsored communications training for our grantees.  In the last five or six years we've sent more than 300 grantees from more than 200 organizations to communications training programs.  I've attended them.  I think they're terrific. Grantees seem to like them. But every so often a colleague would ask 'but do they work?' And I'd say, I don't really know." Adds Brown, "I thought it would really be interesting to go back to interview grantees and observe their work and see if these trainings made a difference. So we decided to embark on that kind of project."

That project, for which the foundation commissioned independent communications design firm the Williams Group, involved surveys of grantees who received Hewlett-sponsored training, interviews with select participants, some ten case studies, and direct observation of a three-day training program.

What did the survey reveal?

The training programs get high marks for quality.  In fact, Hewlett grantees say the training programs -- which covered topics such as the basics of developing a strategic communications plan and how to craft clear and compelling messages to leveraging social media -- were judged by participants as "among the most interactive and useful" they'd ever experienced.

But as good as the training is, it's not enough to make those who aren't professional communicators into experts. As the study found, "For most organizations, a single training experience may build individual awareness, appreciation, and skill — but those gains are not likely to increase over time, spread to others, or transform the organization as a whole without additional, ongoing support."

More so, even an already highly-rated training program can be made even better.  Specifically, the study found four ways it could be strengthened:

• Make sure participants, and the organizations they're from, are ready for training and can "put adequate human and financial resources into place to support communications."
• Invite teams, not individuals, to take part in training. As the study notes, when joined by team members, "participants felt better able to apply training lessons to their actual work while in training and to bring lessons back to the office. Those who attended alone wished they had been joined by at least one partner. Ideal training teams included a decision maker vested with authority (e.g., executive director) and an implementer (e.g., communications or program officer)."
• Robust follow-up is key.  What people learn in class won't stick if the lessons aren't reinforced.  For instance, participants told researchers that they felt they'd benefit from additional courses to "refresh or deepen skills."
• Support efforts to integrate communications with program strategy.  If foundations really wan to see their grantees make communications a key element of their overall work, they can help by similarly incorporating "communications into the development, management, and evaluation of grants/programs. This may involve financial support for communications and ongoing dialogue initiated by Foundation program officers."

Clearly, as the study results show, everyone likes the training they receive and they're more capable as a result, but training is most effective if it's reinforced.

For more on the study as well as the elements of the training itself, view a replay of our webinar and then visit whatnonprofitssay.org, a special Web site where you can download an executive summary of the study, review all the data from the grantees surveys, and read case studies, interview text, and verbatim responses.

~Bruce Trachtenberg, Executive Director, Communications Network

 

guest post: marc lane on tracking the social enterprise's social performance

The final chapter of my new book, Social Enterprise: Empowering Mission-Driven Entrepreneurs, (American Bar Association, 2011) raises the provocative question: "To What End?" 
 
The demand for metrics to evaluate social impact has never been stronger, and that demand comes from all quarters.  Donors and investors want to ensure that their gifts, grants and investments are directed at the most effective social programs.  Policy makers and lawmakers seek to focus on the most worthwhile and impactful segments of social enterprise.  Government budget officials need to allocate funds among those social enterprises which most effectively tackle social problems.  And, perhaps most important, social entrepreneurs themselves, along with their boards and other leaders, need to make informed decisions about their ventures based on hard empirical data.
 
Yet measuring the social good of a nonprofit, for-profit, or hybrid organization is tricky, given the wide range of social problems they seek to address. Some pursue their missions by providing products or services that address a social need directly to disadvantaged people as customers.  Others provide job and career training services directly to disadvantaged people as employees.  Still others combine both approaches. 
 
Measuring success is very different for a substance-abuse recovery center than it would be for a literacy initiative or a workforce development program.  But the process of discovering the social enterprise's impact includes the same elements:

1.    Tracking performance using selected indicators.
2.    Communicating performance both within the organization and to outsiders.
3.    Using the results to make better decisions.
4.    Implementing those decisions to improve both the organization's activities and its operations.
 
The process needs to be organization- and mission-specific, looking at inputs (the resources the organization uses to serve its beneficiaries), activities (the steps the program takes to meet its beneficiaries' needs), outputs (the program's units of service - - the number of people clothed, sheltered or fed, for example), and outcomes (the actual benefit created - - such as the number of once homeless people no longer homeless or the number of once unemployed now engaged in gainful employment). 
 
In all cases, the outcomes must serve as a fair proxy for social impact, and never should activities be mistaken for outcomes.  So a children's theater group shouldn't measure success by the number of children who see a performance, but rather by the number of children who now appreciate the performing arts.  And a food pantry that seeks to break the cycle of poverty shouldn't look only at the number of meals it's served, but the number of nutritious meals it's served while preserving the dignity of those it hosts.  Or perhaps even better, the number of newly self-sufficient people who no longer depend on free meals.
 
Where hard numbers may not be adequate predictors or measures of success, the task of measurement can be difficult.  Still, measuring social impact should be a high-priority goal of the social entrepreneur: if social impact isn't reliably measured, it surely won't be valued by the stakeholders on which the venture depends and to whom it is accountable.

~Marc J. Lane, President, The Law Offices of Marc J. Lane, P.C.

check out CTBA's fiscal symposium on march 25

Our partner, The Center for Tax and Budget Accountability, is holding a Fiscal Symposium, $7 billion in New Revenue, Now What Do We Do? on Friday, March 25 at the Union League Club of Chicago, 69 West Jackson Blvd. This annual event is a great opportunity for nonprofits and foundations to get the latest information on the budget and critical analysis of the economic outlook for the nonprofit sector. To register (tickets are $50) click here.

 It is critical for nonprofits and foundations to engage in these dialogues and keep up to speed on what the state's newly enacted tax increases and spending caps mean for everything from Illinois' economy and business climate, to capacity to core programs like education and social services. Join the panelists for a lively discussion on the interplay between adequately funding basic services and economic development.

For more information contact Tracy Schonberger at tschonberger@ctbaonline.org

-Hannah White, Public Policy Associate

photo credit: http://1.bp.blogspot.com/_VzG9xhJEI-Y/SV4khEWcgyI/AAAAAAAACPo/7caGJAke1HA/s200/stack-of-money.jpg via Creative Commons 

highlights of the trib’s chicago forward event on philanthropy

Update as of March 25, 2011: The Tribune now has a video of the entire event here.

Donors Forum was delighted to be part of an event sponsored by The Chicago Tribune on March 16.  It was part of their new “Chicago Forward” series. Our President and CEO Valerie S. Lies opened the event with a video introduction providing an overview of Chicago-area philanthropy and nonprofits. 

Photos from the event can be found here, at Trib Nation’s Facebook page.

A good summary of the panel discussion is found here, on the Tribune’s blog, Trib Nation.  If you page down to the part of the post called “Cover It Live” and click on the arrow, you’ll see a brief ad, and then you’ll have access to running commentary about the event from the Trib’s James Janega, integrated with Tweets about the event posted by attendees using the Twitter hashtag #tribgive. 

As a precursor to the event, I spoke about philanthropy and giving with Bill Moller on his WGN radio show on March 12. An audio recording is here.

It was good to see longtime and new friends of Donors Forum at the Chicago Forward event, and I think James did a great job in live blogging the proceedings.  I’m not familiar with Cover It Live, the service he used to provide the live blogging, but it seems to be a good one. There’s a free version of it, too, making it something that grantmakers and nonprofits may want to consider for their own events.

~ Celeste Wroblewski, Vice President, External Relations

Video credit: The video was produced by The Chicago Tribune and is being shared with the permisson of The Chicago Tribune.

tell the future mayor what matters to you, and why you – and other nonprofits and grantmakers – matter to chicago!

On the heels of our annual lobby day in Washington D.C., Donors Forum wants to remind grantmakers and nonprofits of the ongoing importance of engaging with public officials.  The mayoral election ushers in the promise of a new era for Chicago; as a city, Chicago faces many challenges, but this new administration also offers nonprofits and foundations an opportunity to build new critical relationships. We encourage you to submit ideas to Mayor-elect Emmanuel here on how to make Chicago better. 

Now is the time for grantmakers and nonprofits to amplify our collective voices and advocate for a stronger 3-way partnership between government, nonprofits, and philanthropy. Remind the Mayor-elect of the value nonprofits and foundations bring to communities through strong partnerships as well as the substantial economic contribution we make.

Donors Forum submitted this letter to the Mayor and will be engaging with the Mayor-elect's transition team, which includes a number of Donors Forum Members and Partners.  Here are some ideas for messages you may want to share:

• Nonprofit organizations are surprisingly robust economic engines, generating nearly 10 percent of Illinois’ gross state product and employing nearly 9 percent of the state’s work force.

• Without our work, change doesn't happen: nonprofits provide a spectrum of essential services - for example, job training, economic development, and housing, plus arts offerings, environmental protection, and much more.
• Foundations are critical repositories of independence, innovation and investment, as well as effective conveners of influential networks and catalysts for regional and local problem-solving.

When submitting your ideas online, we recommend that you include your name, title, the official name of your organization, and a phone number in the submission itself.

~Hannah White, Public Policy Associate

photo credit: http://commons.wikimedia.org/wiki/File:Rahm_Emanuel_press_conference.jpg via Wikipedia Commons

economic outlook 2011: signs of recovery but challenges persist

Donors Forum has released its annual economic outlook report, based on survey responses from grantmaking Members and nonprofit Forum Partners. The survey indicates that – consistent with wider economic trends – there are some signs of improvement: fewer grantmakers reported a decrease in assets and fewer nonprofits reported revenue declines.

Nonprofits’ fundraising efforts over the past year showed increases in virtually all the targeted sources, including special events revenue, board contributions, major gifts, and individual donations.  And, the nonprofits surveyed were nearly evenly split between those who had experienced increases and those who had experience decreases in grantmaker support. 

However, an ever-increasing demand for services combined with continuing late payments from the state of Illinois continue to threaten many nonprofits’ financial stability. Nonprofit cash position has not improved, according to the survey; and not only are nonprofits not filling vacated positions, they are continuing to eliminate regular staff positions with about the same prevalence as shown in last year’s survey.

Grantmakers’ responses to the survey indicate continued caution and selectivity in their grantmaking approach; many continue to restrict the application pool and to offer fewer or smaller grants than before the recession. Interestingly, grantmaking support has increased in certain areas, including nonprofit capacity building. Also, awarding of non-monetary support – pro bono work and in-kind donations, is on the rise, especially among corporate giving programs.

Read or download the full report in PDF format here.

~Marilou Jones, Director of Communications

nonprofit mergers are not always the solution

Pam Clark Reidenbach (pictured) from the Northern Illinois Center for Nonprofit Excellence at Rockford College mentions Donors Forum's Economic Outlook 2010 study in a column she wrote for the Rockford Register Star questioning the value of nonprofit mergers.  An excerpt is here:

        Community leaders are putting pressure on nonprofits to merge as a potential cost-saving measure, but mergers may not be the solution for nonprofits facing financial problems.

A Donors Forum survey shows that 67 percent of Illinois nonprofits experienced increased demand for services in the past 12 months, yet 41 percent had decreased ability to meet that demand. Why would we talk about reducing the number of nonprofits when we cannot meet the overwhelming need?

Mergers can be a strategic option, but they are not a quick financial fix…The value in any merger should be the ability to better meet mission and improve service delivery.

Find the full column here.

~ Claudette Baker, Vice President, Library & Nonprofit Services

crain's includes df members + partners in special focus on nonprofits, giving

In case you missed it, the special focus of the January 24, 2011 Crain's Chicago Business was on nonprofits and philanthropy:

• Valerie S. Lies, President and CEO of Donors Forum, Rafael Malpica of Walgreen Co, and Jason Saul of Mission Measurement were quoted in an article about corporate giving.
  
• An article on L3Cs includes a quote from Harborquest, Inc. and an opinion from David Chernoff, Associate General Council at the John D. and Catherine T. MacArthur Foundation, on why L3Cs may not be necessary.
• A story on tax policy in charitable giving quotes Jewish United Fund/Jewish Federation of Metropolitan Chicago and Metropolitan Family Services and cites a study by Bank of America.
• Another article discusses the trend toward smaller, more personal gatherings of supporters and quotes Chicago Cares, Inc. and Chicago Foundation for Women.
• The Active Transportation Alliance and Chicago Community Trust were quoted in a piece on nonprofits' use of social media.

 ~Celeste Wroblewski, Vice President, External Relations

letter to the editor: year-end giving more important in this economy + state budget crisis

Our CEO's letter to the editor about charitable giving was published by the Chicago Tribune this weekend.  Valerie reminds us that our year-end gifts are more important than ever, as nonprofits that provide essential services to the men, women, and children of Illinois are being clobbered by the economy and the State budget crisis.  She also offers tips on wise giving:

Please remember to give safely and wisely by evaluating the organization before you donate. Ensure the nonprofit can clearly define its mission, will discuss its programs and finances, does not use pressure tactics, and is willing to send you literature about its work or direct you to a website for more information.

For more information about how to evaluate a charitable organization, GuideStar.org is a good place to start as is the website of the Illinois Attorney General.

- Celeste Wroblewski, Vice President, External Relations

new survey shows state budget crisis harming illinois communities

If you are part of Donors Forum's policy work, you know that the State budget crisis is tearing apart our safety net, a network of services that enhance the lives of Illinois’ neediest citizens and strengthen our communities.  Across Illinois, children in need, seniors, people with disabilities and mental illness, and families and individuals who are homeless are at risk of losing the services they depend upon.  Illinois Partners for Human Service, a coalition to which Donors Forum belongs, recently released the results of a survey (PDF download) that quantifies the human cost of the State budget crisis.  The figures speak for themselves:

• 95% of survey respondents (a total of 282 human service providers responded) have been affected negatively in some way by the crisis.
• 70% report that their programs and services have been directly impacted by budget cuts and late payments. 

In order to cope with cuts in government funding and late payments from the State:

• 53% of reporting nonprofits have reduced hours or levels of service,
• 49% have laid off staff. 

 “Illinois residents who need help have been on the chopping block at budget time for many years.  Now we see the results: fewer children in child care; fewer after-school programs for teens; less help for people to get and keep jobs, and less assistance for those with mental illness,” said Judith Gethner, coalition manager for Illinois Partners, in a blog post by Greg Hinz of Crain’s on the subject.

The drastic measures human service organizations across the state have taken in order to continue providing critical services are unsustainable.  Also unsustainable are the continued cuts to human services, a fall-back strategy for legislators looking for an ‘easy’ way to shrink the deficit.  Those reductions are unproductive as well, as they reduce economic activity and increase the strain on other government-funded programs.  An honest, balanced, and comprehensive budget solution is the only way for Illinois to get back on its feet.

For more background information on the state of the human services system in Illinois, see this blog post on Donors Forum’s release of Urban Institute data showing Illinois’ rock bottom status for contracting with nonprofit providers.

For regular updates on the State budget crisis and actions you can take to help lessen its toll on the people of Illinois, subscribe to Donors Forum's free e-newsletter, Policy Update, and its occasional policy alerts.  Send an email to advocacy@donorsforum.org and include your name, title, the name of your organization, and an email address.

~ Laurel O'Sullivan, Vice President, Public Policy

photo credit: http://en.wikipedia.org/wiki/File:Illinois-counties-map.gif via Wikimedia Commons

new essay serves as call to action for forging a new compact in illinois

How do we move from a system weighed down by mistrust and inefficiency to a new agreement in which all stakeholders work together to provide effective, high-quality services that truly reflect the needs of Illinoisans? 

A critical component to ensuring the sustainability of Illinois communities is advancing a three-way partnership between government, philanthropy, and nonprofits.  To begin this dialogue, Donors Forum commissioned an essay from the publication Illinois Issues.  Entitled “Renewing the partnership between the state and nonprofits” and written by Brent Never, the essay reframes Illinois’ fiscal and systems failures and gives us a new opportunity to engage with lawmakers, foundations, and nonprofits to forge a path ahead.

The work of nonprofits and government is interdependent – our system has developed in such a way that one cannot function without the other.  But, as Brent shows in the excerpt below, when the relationship is unbalanced, neither party can achieve its mission: to create a healthy, vital, and economically viable state.

As the consequences of fiscal imbalance sweep from Springfield across the state, Illinois’ most vulnerable citizens and others who rely on nonprofits face the specter of fewer services, longer wait times, and greater worry about the future. While the economic downturn eroded the ability of Illinois government to pay for services, it also forced more people to turn to human service providers and other nonprofits.  The strain of those twin pressures has stretched the bonds between state government and its contractors to a near breaking point….The social compact between Illinois government, its nonprofit service providers and the citizens who count on those services has been seriously damaged.

To make real, lasting change in Illinois, it is important that all stakeholders be flexible, open to change, and learn from others exemplifying best practices.   Never highlights (page 9) innovative solutions from New York City and England, which have both tackled problems similar to those we face in Illinois.  He also examines factors (page 7) that have allowed, over the long term, government to form strong compacts with institutions such as the military industrial complex and programs like Headstart.

To advance this three-way dialogue in Illinois:

Nonprofits must

• attempt to break down the silos that have typically stymied cross-sector solutions,
  
• engage in sustained dialogue with lawmakers, and 
• take a comprehensive look at the services it provides and engage in evaluation and improvement to maintain the trust of the public and state leaders. 

Government must

• recognize the central role nonprofits play in the delivery of service and
• involve nonprofits and philanthropy in the planning and development of progress metrics.

Philanthropy must

•  be willing to lead by bringing its best practices, innovation, and research and development expertise to the table as models for leveraging public-private partnerships.
  

As Donors Forum advances the development of this three-way partnership in Springfield, we want your input to achieve a healthier, stronger, more livable Illinois.

~ Laurel O'Sullivan, Vice President, Public Policy

guest post: grantmakers need to focus on growing impact, not size

Innovation and scale are key themes in several high-profile federal initiatives, including the Social Innovation Fund and the Promise Neighborhoods program, and even in Mark Zuckerberg’s $100 million donation to Newark public schools. These efforts respond to a growing feeling that current approaches to improve health, education, and economic opportunities are not having the desired impact. Government, private and individual funders alike have a keen interest in identifying and growing the impact of successful community-based solutions.

The focus on innovation and scale has been met with a healthy dose of skepticism. Some of the nonprofit sector’s greatest champions and most thoughtful leaders have voiced concern this is just the latest fad, that it doesn’t appropriately build on what we know works, and that it is an insider-only conversation with little relevance to the broader field. When innovation and scale are framed as ends in and of themselves, these criticisms are entirely valid. But when scale and innovation are exclusively in service of growing the impact of important programs, these criticisms fall away.

Insights generated by members of the Grantmakers for Effective Organizations’ community suggest we need to frame the conversation in some new ways, including:

1. Bigger is not always better: Many think of scale exclusively in terms of bigger organizations and programs replicated in more sites. These are important approaches, but not the only ones. The most important thing to scale is not the size of an organization, but the results it achieves. Scaling impact is about leveraging resources and relationships to achieve better results, namely significant and sustained benefit for people and communities.
2. Innovation and impact are not synonymous: Innovation is primarily important in so far as it enables an expansion of social impact.  While fostering innovation can lead to new breakthroughs, we must recognize that impact can grow by appropriately resourcing ideas that have been around for years.
3. Waiting for Superman can be your kryptonite: Leadership is a key ingredient for all efforts to grow impact. Yet the type of leadership the most effective social entrepreneurs are now exhibiting is a collective, facilitative and networked approach. Both individual and institutional donors can grow impact by supporting those organizations that are built to far outlast their founders. 
4. Funders can do harm: When funding nonprofit solutions, we must ensure our investments are not structured in a way that is harmful to those we intend to help. Funders can be sure to “do no harm” by weeding out inefficiencies in the grants process; picking partners well; providing significant, ongoing, flexible funding; and remembering that growing impact at any scale will take time. Additionally, funders are wise to steer clear of trying to be the sole architects of social solutions and instead trust the instincts and ideas of the high-performing nonprofits and other stakeholders that are closest to the problems we hope to solve.

For more information on GEO and Scaling What Works, visit www.geofunders.org.

~ Kathleen Enright, president and CEO, Grantmakers for Effective Organizations

guest post: chicago-based issue lab is a wealth of nonprofit research from across the nation -- and it's free!

Ask anyone at a gathering of nonprofit professionals whether they think its a good idea to share information and you will get a resounding yes. It sounds like a no-brainer right? I mean, why recreate the wheel if you don't have to? The more you know about what works and what doesn't, about how other nonprofits are addressing the issues that are core to your mission, or how different foundations are approaching our toughest social problems, the better you are at your own job.

But easier said than done. Most of us only share our knowledge with colleagues when we're asked. And most of our organizations only share their knowledge through their web site, which is too often a partial (and pretty passive) offering of what we actually know about an issue or set of specific practices. And in turn when we are looking for information we are most often limited to the small circle of people we know, the same old cast of organizational characters whose opinions dominate the discussion of an issue, or worse yet the thousands of unfiltered results from a Google search.

This is where IssueLab comes in. IssueLab is a an open access archive of nonprofit research. We gather research from nonprofits large and small on 34 different social issue areas -- everything from aging to housing to energy and the environment. It's free for nonprofits to share their work with us and it's free for users to view and download any of the thousands of white papers, case studies, and evaluations in the IssueLab collection. We also work hard to share this body of knowledge with a broader audience, through RSS feeds, content partnerships, and social media outreach, helping to enhance their understanding of tough social issues with knowledge from nonprofits that tackle these issues each day.

With resources as scarce as they are right now, we cannot afford, either ethically or practically, to reinvent the wheel over and over again. We have to begin to value what we know and to share that with other people working on the same issues. It's simple: everyone benefits when we share one of the sector's greatest assets, our unique understanding of social problems and the solutions to those problems.

Here are a few collections that may be of particular interest to grantmakers and nonprofits.

• Capacity Building
  Research that either explicitly addresses the question and challenge of nonprofit capacity building or offers an evaluation of programs where capacity building was part of the intended outcomes.
  
• The Volunteering Resource Library
  Includes dozens of research reports from IssueLabs collection on the subject of volunteering. (In partnership with VolunteerMatch and IdeaEncore)
  
• Communications
  A collection of reports on the how, why, and what of evaluating communications efforts. This collection was put together with the help of Edith Asibey from the Atlantic Philanthropies and Asibey Consulting

   ~ Gabriela Fritz, Co-Director, IssueLab

the importance of a 3-way partnership: government, philanthropy + nonprofits

Last week, Laurel O'Sullivan, Vice President, Public Policy at Donors Forum, shared remarks with colleagues from foundations and nonprofits at Independent Sector's Annual Conference in Atlanta.  The session, called Partnering With Government: Opportunities and Realities, was framed as a debate between Laurel and Otis Johnson, mayor of Savannah, GA.

Laurel's comments touch on the vital 3-way partnership between government, philanthropy, and nonprofits that is the cornerstone of a vibrant society.  

Here is an excerpt from Laurel's remarks.  Find the complete transcript here (PDF download). 

We believe strongly in a 3 way partnership, with philanthropy the third partner at the table needed to leverage its best practices and ability to catalyze change.

Philanthropy bridges the distance between the government and nonprofits; serving one and regulated by the other, nonprofits and government have a symbiotic, yet sometimes adversarial, relationship to one another. As an invested stakeholder in the health of our communities, philanthropy understands the complexity of government, partners closely with nonprofits and is invested in a healthy State that is a careful steward of nonprofit resources and services. Above all philanthropy can navigate these mutual needs, accountabilities and processes while simultaneously de-politicizing the conversation.

Surely there is more agreement than disagreement on the fact we, government and nonprofits, are interdependent and share a mutual goal to create a livable America. This was the premise forged over 200 years ago during the days of Alexis de Tocqueville that our nonprofits have a vital and unique role to play in empowering the underrepresented in our democracy, amplifying their voice whether it’s through direct services, civic engagement, preserving the environment, or supporting the arts. 

Forty years ago this implicit agreement was made explicit under Lyndon Johnson’s Great Society by providing government funding to nonprofits, which has only grown and expanded under every president since Ronald Reagan.  Its premise endures today and includes these, eminently reasonable things that we can hopefully agree on: 1) that we should serve our most vulnerable, 2) that we must do the most with limited resources and 3) that we agree nonprofits are unique and valuable partners because they represent local communities in ways government doesn’t; and the underlying premise of all of this is that 4) we have mutual trust in each other..

To read the complete remarks, click here (PDF download).

 ~ Hannah White, Public Policy Associate

new study: illinois grantmakers engage in advocacy to get the most bang for their buck

Public policy grantmaking has been described as "one of the most powerful tools available to foundations for creating real change."¹  A new survey, conducted by Donors Forum and the National Committee for Responsive Philanthropy confirms that many Donors Forum Members are using this funding strategy to maximize impact and outlines ways for more foundations to get involved.

Donors Forum distributed a survey to 191 of its grantmaking Members to learn more about their approach to policy engagement. As we continue to broaden the dialogue among funders and between funders and grantees about the value of engaging in advocacy and supporting the policy interests of nonprofits seeking to improve their communities, we wanted to have a baseline understanding of what foundations in Illinois are doing.

Here are the five main findings.  To see the rest of the report, click here.

1. Eight in ten of the grantmakers surveyed reported active involvement in policy outreach and advocacy-related activities, both directly and through their grantees.

2. Two-thirds of respondents provide funding support for policy advocacy-related activities.

3. One-fifth (21 percent) report allocating at least 25 percent of their grant dollars to advocacy-related causes.

4. Board interest or encouragement was the factor most likely to motivate grantmaker advocacy funding.

5. Familiarity with advocacy laws and practices correlates with likelihood of funding advocacy.

As shown by the survey, grantmakers can advocate in a number of ways:

• Convene stakeholders;
• Commission policy research;
• Foster public awareness using media;
• Provide leadership development to community members;
• Mobilize citizen participation;
• Meet with elected officials;
• Testify before a legislative committee or body.

It is well documented that funding advocacy is a strategy with a high return on investment and one of the most effective ways to bring about positive social change.  We are encouraged to see so many of our Members engaging in this work and will continue to provide information, resources, and opportunities for dialogue to facilitate wise decisions by funders about whether and how to fund advocacy.

 ¹ Alliance for Justice (2004). Investing in change: A funder's guide to supporting advocacy. Washington, DC. Author, pg 1.

~ Laurel O'Sullivan, Vice President, Public Policy

Photo 1: http://www.flickr.com/photos/fibonacciblue/4619893377/  via Creative Commons.

Photo 2: http://www.flickr.com/photos/maceelaine/3742117588/sizes/s/in/photostream/ via Creative Commons

*A special note to public and private foundations.  Make sure you know your rights when it comes to lobbying and advocacy.  For more information: Public foundations, go here and here.  Private foundations, go here.

in race to the bottom, illinois wins as the worst for late payments to nonprofits

For more than a year now, we’ve been hearing that Illinois’ human services system is “on the precipice,” “walking a tightrope,” “on the verge of a crisis.”  Communities, local economies, and taxpayers are feeling the pain of a dysfunctional system more acutely than ever.  It is clear that Illinois is no longer on the brink of a system collapse; the crisis is upon us and the time for action is now.

Today, the Urban Institute released a one-of-a-kind report on the state of the human services contracting system nationwide.  It doesn’t paint a pretty picture nationally, but in terms of late payments and several other indicators, Illinois is in a league of its own.  Illinois ranks #1 in the country for late payments, #3 for payments failing to cover the full cost of contracted services, and #3 for government changing contract terms mid-stream.

This is an irresponsible and fiscally unstainable allocation of taxpayer dollars that has a material affect on the vitality of Illinois’ economy and the health of our communities.  The State has broken its promise to taxpayers and nonprofits, and our neediest citizens are bearing the brunt.  As the Chicago Tribune notes today, two thirds of nonprofits report freezing or cutting salaries, more than half have cut staff, 42% borrowed to cover cash flow, and 31% have reduced the number of programs or services provided to Illinoisans in need just when that need is at its highest.

Donors Forum has developed a roadmap to help get Illinois back on track.  Fair and Accountable: Partnership Principles for a Sustainable Human Services System is an action plan for a responsive, fair, efficient, and accountable human services system that will benefit all Illinoisans and serve to strengthen the nonprofit and philanthropic sectors.  

 What You Can Do:

• Download the report and press release and share it with your board, constituents, and elected officials.
• Go here for more information about the Partnership Principles, a link to endorse, and to download the document.  
• Watch for coverage in the Tribune today, The Capitol Fax Blog, and elsewhere. 
• Respond to the coverage by sharing your story in a letter to the editor. 
• Comment below – we want to hear from you, our Members and Partners.  In the coming weeks, we’ll be highlighting your stories.
• Lend your expertise by completing the HB5124 Provider Survey by October 11th.  HB5124, the DHS Streamlined Auditing Bill, will streamline the contracting system by reducing redundant auditing requirements.  It is a sign of progress, though we still have a long way to go.
• Ask colleagues and constituents to take action, too. 

 ~ Laurel O'Sullivan, Vice President, Public Policy, Donors Forum

rare chance to learn in chicago with a world-renowned thinker on social media for nonprofits: join us oct. 13

The Networked Nonprofit: Connecting with Social Media to Drive Change
Wednesday, October 13, 9 am - 11 am; coffee and networking at 8:30 am, Roosevelt University, Congress Lounge, 430 S. Michigan Ave., Chicago

The fee (Forum Partner fee is $64; regular fee is $90) includes a copy of Allison's book.

Join Donors Forum for a workshop with leading thinker Allison Fine, co-author of The Networked Nonprofit: Connecting with Social Media to Drive Change. Learn what your organization can do now to maximize the opportunities to tell your mission story, engage volunteers, and increase donations by using Twitter, Facebook, Flickr, YouTube, wikis, blogs, and more. Come for coffee and networking preceding the workshop from 8:30 - 9 am.

Allison studies and writes about the intersection of social media and social change. She is the author of the award-winning book Momentum: Igniting Social Change in the Connected Age (Wiley & Sons, 2006). Her new book, The Networked Nonprofit, co-authored with Beth Kanter, was published by Wiley & Sons in 2010.

She is a Senior Fellow on the Democracy Team at Demos: A Network for Change and Action in New York City. She was commissioned by the Case Foundation to write a paper on young people and activism called Social Citizensbeta. She has also edited a collection of essays, Rebooting America, about ways to reinvent democracy using new media. Allison hosts a monthly podcast for the Chronicle of Philanthropy called Social Good and writes her own blog, A. Fine Blog. 

The registration fee includes a copy of the book. Attendees are encourage to blog and tweet about this event! Please use this hashtag when discussing the luncheon on social media: #dfnetworks10.

 

guest blog: provena decision could be canary in the coal mine for illinois nonprofits

Perhaps you’ve read about localities around the country imposing property taxes on nonprofit organizations, or revoking their sales tax exemptions, or squeezing additional PILOTS (Payments in Lieu of Taxation) from the wealthiest among them.  Perhaps you’ve even congratulated yourself on the fact that no such stories have appeared about Illinois.  Unfortunately, no news is not good news.

Rather, local coverage of the issue has been muted because Illinois can withdraw exemptions without legislative action.  Property tax exemption for charities, schools, and churches is guaranteed by the state’s constitution.  While that might seem to make exemptions here exceptionally secure, it also means that determinations of their extent are made by the courts. And while few politicians are eager to be seen beating up on nonprofits, judges –- even elected ones –- are less constrained. 

When the Illinois Supreme Court ruled this spring that Provena Covenant Hospital didn’t merit a property tax exemption because it failed to provide adequate charity care, public discussion focused on the effect on health care.  But nothing in the decision necessarily restricts its impact to hospitals.  Indeed, Provena takes its reasoning from an earlier case about nursing homes.  Each case grapples with the meaning of the word “charity” in the state constitutional provision, and each holds that the word isn’t synonymous with “nonprofit.” 

Elaine Waterhouse Wilson, a partner at the Quarles & Brady law firm, sees the decision as a threat to nonprofit  “organizations that are supported primarily by fees,” even below-market fees.  Though Provena accepted Medicaid payments which did not reimburse it fully for the care provided, the court held that insufficient to constitute ‘charity.’  “It was very clear [under the ruling] that you had to be giving things away,” said Ms. Wilson.
 
Nonprofits may organize and persuade the Illinois legislature to clarify the amount of “charity” necessary to retain tax exemption.  But Professor Phillip Hablutzel of IIT Chicago-Kent College of Law, co-author of the Illinois Not-for-Profit Corporation Act, doubts it.  “In the twenty years I’ve been involved, there hasn’t been a coherent front among charities in facing the legislature. It’s hard to get these people to make common cause–the museum people don’t see what they have in common with the churches.” 

Nor, apparently, do many human services agencies or arts groups see what they have in common with the hospitals. Despite the national trend and Donors Forum’s attention to the issue, including hosting a post-Provena program featuring Ms. Wilson and a representative of the Attorney General’s office, nonprofits in Illinois appear skeptical that the decision may have an impact on their operations. 

William Rattner, Executive Director of Lawyers for the Creative Arts expressed confidence that his organization is secure in its exemption, “They’ll keep going after the hospitals because it’s easy and that’s where the money is.”  Laurel O’Sullivan, vice president of public policy at Donors Forum, isn’t so sure.  “I’m afraid that many nonprofits are unaware of how a decision like Provena could become Illinois’ canary in the coal mine, an indication of the state’s intentions of following the national trend of seeking additional revenue from nonprofits.”

Already the Provena decision may have an effect on a pair of cases involving luxury retirement developments operated by the nonprofit Franciscan Communities Inc.  A group of local taxing bodies in Lake County defeated the group’s application to exempt its high-end senior care facility from property taxes, a decision now under review in the circuit court.

Franciscan Communities also filed suit in Cook County asking that the assessor be required to allow it to retain exemption on the Clare, Gold Coast property it purchased from Loyola University of Chicago and redeveloped as a luxury senior-care condominium community.  Though the original suit was dismissed, observers expect Franciscan to re-file it.  They also expect Franciscan to lose.

“Provena is a definitive victory for local governing bodies,” said municipal lawyer Vanessa V. Clohessy, partner at Hodges, Loizzi, Eisenhammer, Rodick & Kohn, who represented the school district in the Lake County case.  Clohessy and her associate Steven M. Richart said Provena made it much likelier they’d prevail on appeal in Lake County, but that these cases were so fact-specific it was hard to predict the ruling’s impact on other nonprofits. 

If and when a Provena-style loss of exemption hits another nonprofit, the impact on its operation will be substantial.  “In the current economy,” said Professor Hablutzel, “it would be hard to do fundraising for another one-third of your budget so the taxes could be paid.”

~ Blogger Kelly Kleiman is a consultant to nonprofits as well as a lawyer and a freelance journalist.  Her work has appeared in many media outlets, including the New York Times, Wall Street Journal, Huffington Post, Christian Science Monitor, and Chicago Public Radio.

help get the state back on track -- join us september 22 for "a better illinois"

As the “Great Recession” drags on, pushing Illinois’ unemployment rate significantly above the national average, and Illinois’ budget crisis strip organizations of funding and delay payments for vital services, there is more need than ever for Illinois leadership to set clear priorities to gets its financial house in order or act to address it.

Fortunately, there are organizations, business leaders, politicians, coalitions, and individuals out there casting their vision for a new way forward.  Donors Forum is co-sponsoring a program on Wednesday, September 22nd with the Responsible Budget Coalition and the Community Media Workshop  that will bring together leaders from human services, health care, government, and business to address the state budget crisis and the need to raise adequate new revenue to fix it.

A Better Illinois: Getting the State Budget Back on Track will feature keynote speaker and prominent economist Dean Baker of the Washington DC-based Center for Economic and Policy Research; a panel including Cook County Assessor James Houlihan, Howard Peters of the Illinois Hospital Association, and others, moderated by Mike Lawrence, former director of the Paul Simon Institute on Public Policy, and a budget overview by Ralph Martire of the Center for Tax and Budget Accountability.

Find details of the event and how to register here.

~ Laurel O'Sullivan, Vice President, Public Policy

photo credit: http://www.flickr.com/photos/mhowry/4672310833/ via Creative Commons

guest post: new research shows settled immigrants are as likely to give charitably as native born americans

Una Okonkwo Osili has been an immigrant twice. She is the daughter of an American mother and a Nigerian father who met as students at Cornell University. When she was six months old, the family moved from New York to Enugu, Nigeria, where she grew up among thousands of other immigrants looking for jobs in the Nigerian Oil Boom in the 1970s. When she was 15 she came back to America, where she got her BA at Harvard, and then got her Masters and PhD in economics from Northwestern University. Again she rode a wave of immigration as America’s foreign born population increased 57 percent, to 31.1 million.

Today Dr. Osili is the Director of Research at the Center on Philanthropy at Indiana University. She is the go-to guy in academia for analysis of how immigrants in America give, or don’t give, to charities and friends. Like most people she learned about giving first from her own parents. She says her Nigerian father used to tell her, “If you close your hand, nothing will leave, but nothing will come in.” So she chose to combine her expertise in economics with a personal understanding of what it takes to become a part of a new land.

Her paper Immigrant Assimilation and Charitable Giving (pdf download) provides data to debunk myths about immigrants. Osili’s research shows that, after the first ten years, immigrants to America give to charities at the same rates as native born Americans, and they give more through what she calls “private transfer networks.” In fundraising terms, this means immigrants give the same as native born Americans through formal giving to charities and give more than native born Americans through informal giving to friends and families in need. Formal giving would be donating money to a hospital. Informal giving is giving money and goods to a family member outside your own household (not your own children), such buying medicine for your brother, giving your grandmother a ride to the doctor, or giving your cousin who just had a baby a bag of groceries and a box of diapers.

Using data from the Center on Philanthropy Panel Study (COPPS), Osili learned that:

• Immigrant status does not have a statistically significant impact on the probability of giving or the level of charitable giving.

• Only recent immigrants (who migrated within the past 10 years to the US) are less likely to give. As immigrants gain US experience, their participation and levels of charitable giving become the same as American natives.

• On the other hand, immigrants are 11 percentage points more likely to give private transfers of money to family, friends, and neighbors living outside their own household (not counting their own children or alimony.) Unlike their giving to charities, immigrants with 10-15 years experience in the US continue to have higher incidence and levels of income transfers. So after more than ten years, immigrants give as much as native Americans to formal charities, but also continue to give more in informal giving to help their family, friends, and neighbors.

University fundraisers are already using Osili’s data. Many universities use tailgating parties to cultivate their major donors, leveraging two great incentives for the traditional white male donors: exclusive parking spots and great quantities of adult beverages. However, the schools found they were not attracting their minority alumni from science and engineering to tailgating parties. When they offered scientific lectures by star professors, minority alumni turned out in much higher numbers to the cultivation events.

Americans are, by far, the most generous people in the world. The latest edition of Giving USA (pdf download) shows that Americans gave more than $303 billion to charities in 2009 in the midst of the Great Recession. This is more than the GDP’s of South Africa and Thailand, slightly less than the GDP’s of Argentina and Denmark. We give away a lot of money. But as Dr. Osili says, “Giving back is a part of every culture and every religion.” Her analysis shows that immigrants bring with them the traditions of caring directly for the people closest to them, and quickly learn to give through formal charity channels as well.

~ Joan Flanagan is the professional fundraiser for the Center for New Community, a Forum Partner.  This is a cross post from the Center's blog. A popular trainer for Donors Forum, Joan is next scheduled to teach Fundraising for Smaller Organizations and Congregations on Tuesday, October 19, 2010.  You can register now for only $64 for Forum Partners (regular fee is $90).

We invite other Members, Associate Members, Forum Partners, and allies of Donors Forum to submit guest posts.  Please contact the editor.

crain's focuses on the nonprofit sector + corporate giving; includes df members + partners

It is no secret that discussion about the nonprofit sector has been increasing since this economic recession began. Crain Communications Inc. is no different. In the August 16, 2010 issue, they focus on the nonprofit sector. Discussing everything from corporate funding to emerging giving trends, Crain's dissects philanthropies and released its annual list of corporate giving, which included many Donors Forum Members.  The lead story on the Focus section of the Crain's Chicago Business website quotes Donors Forum President & CEO, Valerie Lies.

RELATED RESOURCES FROM DONORS FORUM: Find more on Donors Forum’s website about corporate giving. Nonprofits interested in engaging corporate volunteers and securing corporate support should attend Building Strategic Relationships with Corporations and Foundations on August 19, 2010.  One of the 21 shared interest groups that Donors Forum convenes on behalf of grantmaking Members is The Corporate Committee.  Members can log in to find more information on The Corporate Committee here.  I invite grantmakers interested in joining Donors Forum, its Corporate Committee, and other shared interest groups to contact me at 312-578-0090.

~ Robin Berkson, Senior Vice President, Donors Forum

donors forum members in the news about trends in corporate giving, pro bono services + volunteering

The donation of goods and volunteer service, in addition to or instead of cash, has been the subject of two recent news reports. Donors Forum Members Bank of America,  Deloitte Services LP, IBM, and Microsoft Corporation were mentioned while Abbott Laboratories and Kraft Foods, Inc. were listed as companies who gave 50% or more in products rather than money in 2009 in a new USA Today article, "Companies donate employees' time, service instead of cash." 

The article discusses a study done by The Chronicle of Philanthropy and USA Today, in which they surveyed the largest U.S. corporations to find out how much money they donate to charities and which causes they support. The results showed that the economic recession dramatically affected cash donations, but also showed a growing trend of companies donating their employees' time, advice, and service instead of cash.

In a similar vein, a Chicago Tribune article recently featured Family Focus, a Forum Partner, and Donors Forum Member MB Financial Bank in an article about Family Focus receiving donations of architectural design, legal services, and construction costs to help them install an elevator in their Evanston location.

RELATED RESOURCES FROM DONORS FORUM: Find more information on Donors Forum’s website about corporate giving. Nonprofits interested in engaging corporate volunteers and securing corporate support should attend Building Strategic Relationships with Corporations and Foundations on August 19, 2010.  One of the 21 shared interest groups that Donors Forum convenes on behalf of grantmaking Members is The Corporate Committee.  Members can log in to find more information on The Corporate Committee here.  I invite grantmakers interested in joining Donors Forum, its Corporate Committee, and other shared interest groups to contact me at 312-578-0090.

~ Robin Berkson, Senior Vice President, Donors Forum

state of illinois owes $490 million to nonprofits; add your voice to help

490 MILLION DOLLARS.

That’s how much the State of Illinois currently owes to nonprofits that provide services to Illinoisans on behalf of the State.  And if you include what is owed to private business as well as nonprofits, the total amount owed is $1.3 billion! 

The State's economic troubles have hit nonprofits hard.  This list (PDF download), compiled by Illinois Partners for Human Service, drives that point home.  Obtained via a Freedom of Information Act Request to Illinois Comptroller Dan Hynes, the document lists the specific amounts owed to hundreds of nonprofits across the state.

We were glad to see this issue covered on the Progress Illinois blog and on Greg Hinz’s blog at Crain's Chicago Business.  More and more people are coming to understand that Illinois nonprofits are expected to provide vital services without the reimbursement they were promised by the State.

Illinois Partners for Human Service is raising public awareness and promoting public policies to protect vital human services for men, women, and children in Illinois.  We encourage you to join them.

By the way, Illinois Partners endorsed Donors Forum's Partnership Principles for a Sustainable Human Services System -- have you?

~ Hannah White, Public Policy Associate, Donors Forum

a sorry state: the unfortunate facts + what illinois nonprofits + funders can do to fight them

It’s no surprise to anyone in the nonprofit and philanthropic sector that Illinois’ economy is in a sorry state.  Everyday, we are confronted with disturbing stories on the front page of the newspaper or from friends and colleagues about vital services being cut, sharply increasing need, lay-offs, and delayed State payments to contracted providers.  Due to a failure of State leadership, the basic services, essential safety nets, and core programs that make Illinois a great place to live are all in danger.

As part of its mission to strengthen the nonprofit sector in Illinois, Donors Forum is collaborating with a variety of organizations to promote accountability of the State through fiscal reform and reform of the human services system.

Voices for Illinois Children, a Donors Forum Partner and a member of Donors Forum's Public Policy Committee, recently released a report through its Tax and Budget Policy Initiative called Passing the Buck: FY 2011 State Budget Threatens Key Programs for Children and Families.  The report closely examines and analyzes the potentially devastating impact of the lump-sum budget passed by the Illinois General Assembly.

Passing the Buck (PDF download) is a disheartening examination of the failure of leadership in Springfield to take responsible action to fix the State’s structural deficit or reduce the huge backlog of unpaid bills and the fundamental need for a more fair and accountable system.  The report addresses four main issues:

• Lump-sum appropriations for education, healthcare, and human services, as well as additional lump sums to be allocated to the Governor
• Emergency budget powers enabling the Governor to control spending and make changes in state programs
• Stop-gap revenue measures that will exacerbate budget problems in future fiscal years
• The unresolved issue of state pension contributions for FY 2011

With a cumulative deficit nearing $10 billion and a $5 billion backlog of unpaid bills to school districts, human service agencies, and local communities, the report demonstrates how Illinois missed yet another opportunity to responsibly address the ongoing budgetary crisis.  How much longer can we afford to wait?

You can act now to help by reading and endorsing Donors Forum's Fair and Accountable: Partnership Principles for a Sustainable Human Services System.  Other ideas for taking action are here.

~ Laurel O'Sullivan, Senior Director, Public Policy, Donors Forum

invitation to july 27 conference call for grants for arts + cultural organizations (proposals due 8.23.10)

Update as of August 6, 2010: You can access a recording of the conference call and other resources here.

Ra Joy of  Arts Alliance Illinois has invited Members, Forum Partners, Associate Members, and friends of Donors Forum to join in a free conference call, New Federal Funding Streams for Sustainable Communities: Guide for Arts and Cultural Organizations. This will take place on Tuesday, July at 2:30 p.m.

The call, sponsored by The Richard H. Driehaus Foundation, a Donors Forum Member, will discuss the recently unveiled $100 million grant program funded by the U.S. Department of Housing and Urban Development (HUD), and endorsed by the National Endowment for the Arts (NEA), designed to create more livable communities nationwide.  The call will explore the possibilities for grant applications (due August 23) by arts organizations and it will also cover challenges and opportunities associated with cross-sector arts collaborations. It will feature:

• Tom Borrup, principal, Creative Community Builders, and author of The Creative Community Builders' Handbook,
• Dan Lurie, Senior Advisor to the Deputy Secretary, HUD,
• Alaka Wali, Ph.D., Director of the Center for Cultural Understanding and Change, Field Museum of Natural History, and
• Cheryl Yuen, a cultural development and arts management consultant.

Download a PDF of a fact sheet about the funding opportunity and the conference call here.

Please RSVP or direct questions to Scarlett Swerdlow at swerdlow@artsalliance.org or 312.855.3105 x13.  Space is limited.

~ Susan Parsons, Communications and Development Volunteer, Donors Forum

chicago community trust offers new grants for programs, transition + restructuring in human services; proposals due 8/13/10

The Chicago Community Trust has announced $1.5 million in funding in a second round of Unity Challenge grants for organizations whose programs have been targeted for funding cuts by the State and the City while simultaneously experiencing increased demand for services.   Applications are due August 13, 2010.  Find:

• an overview of the request for proposals here (PDF download).
• the application here (Word Document).

Specifically, the funding will help nonprofits with

• Meeting increased needs related to aging, domestic violence, developmental disabilities, or mental health: Projects that respond to a demonstrated expansion of service caseload above previous levels because of increased client demand. This includes funding for direct services or alternative strategies for providing client services.

• Program conclusion or transition in services related to child care or youth, homelessness, aging, domestic violence, developmental disabilities, or mental health: Projects that provide for the orderly closing of programs because of loss of funding or movement of clients. This may include assisting clients with locating comparable services at another site, providing transitional or concluding services, or blending a closing program into another complementary program. 

• Agency streamlining, restructuring, or shutdown for organizations that provide services related to child care or youth, homelessness, aging, domestic violence, developmental disabilities, or mental health: Projects that create greater agency efficiency, necessitated by either the government funding crisis or the economic recession. Types of eligible projects would include agency mergers, collaborations, cost-sharing, and back-office or other service efficiencies. Proposed projects must show how agency change will lead to sustained or improved service to at-risk persons, how the project will result in a stronger agency infrastructure better equipped to weather economic hardship, and cost savings. Community-wide planning processes to address multiple local service needs will also be considered as will the one-time costs associated with closing an agency and transitioning the clients to a new service provider.

Find information and resources on mergers and other types of strategic restructuring here.

The Chicago Community Trust is a Member of Donors Forum and a sustaining benefactor.  Find details here about what Donors Forum and other organizations have been doing -- and how you can help -- to sustain the human services system in Illinois during this economic crisis.

~ Celeste Wroblewski, Vice President, External Relations, Donors Forum

a handy round-up of resources on the giving usa 2010 report

Thanks to Edith Falk, a member of Donors Forum's board of directors; Campbell & Company, and the Giving USA Institute, we are able to provide you with a round-up of links on Giving USA 2010: The Annual Report on Philanthropy for the Year 2009, which aims to reflect upon giving patterns of 2009 so that nonprofit organizations can adjust and improve their fundraising efforts in 2010 and beyond.  The resources include:

• an executive summary of the report (download a PDF or view online)
  

• a free 90-minute on-demand webinar on the report, called First Look: Giving USA 2010

• a video of Edith Falk introducing the report on the Giving USA website (Edith is also vice-chair of the Giving USA Foundation)

• a link for viewing a video on five ways to use the report as well as links for purchasing the report, slide decks with key tables from the report, and other resources related to the report.

~ Susan Parsons, Communications and Development Volunteer, Donors Forum

new report stresses importance of advocacy for nonprofits + need for grants for advocacy

Last April, Donors Forum and the Listening Post Project, an initiative from the Center for Civil Society Studies at the Johns Hopkins Institute for Policy Studies, convened a group of 20 thought leaders from the region's nonprofit community.  Together, we explored the realities of nonprofit involvement in the policy process, the importance of advocacy, and increasing political engagement in order to support the sector.

The Listening Post Project recently released a report that summarizes the discussion (PDF download) and underlines the societal importance and organizational benefit of advocacy for all nonprofits, regardless of size or perceived capacity.  The key points addressed during the discussion were:

1. Advocacy efforts must directly involve nonprofit organizations themselves;
2. Intermediary organizations should play an active role in supporting the advocacy efforts of individual organizations;
3. Foundations must be better educated on the need to fund advocacy; and
4. The policy community itself needs to be educated and engaged.

While there are some obvious hurdles in mobilizing a greater portion of the nonprofit community in advocacy and lobbying, our discussion and this report are a reminder of the ways in which foundations, nonprofit associations, and direct service organizations can better leverage existing resources and assets to support political engagement.

~ Laurel O'Sullivan,, Senior Director, Public Policy, Donors Forum

nonprofit leaders invited to a free seminar june 9 on the latest "giving usa" report

Two Donors Forum Partners, Campbell & Company and the Northwestern Memorial Foundation, are inviting Illinois nonprofit leaders to a free seminar presenting the newly released Giving USA 2010, a comprehensive annual report from the Giving USA Foundation on results and trends in philanthopic giving in the U.S.

First Look: Giving USA 2010
Wednesday, June 9, 2010, 4:30-6:30 p.m. (Registration, 4:00 p.m)
Northwestern Memorial Hospital
Prentice Women's Hospital  - Conference Room "L", 3rd floor
250 East Superior St., Chicago, Illinois

Campbell & Company President Peter Fissinger will present the newly released findings.  Chair and CEO Edith Falk, a Donors Forum board member, will moderate a discussion with nonprofit leaders who will share their insights about the trends, how they may affect fundraising, and what the future may hold.  They will take questions as time allows.  The panel includes:

• Stephen Falk, President, Northwestern Memorial Foundation, Chicago (not related to Edith Falk)
• David Hawkanson, Executive Director, Steppenwolf Theatre Company, Chicago
• Laura S. Thrall, President and Chief Executive Officer, United Way of Metropolitan Chicago (a Donors Forum Member)
• Laura S. Washington, CEO, Woods Fund of Chicago (a Donors Forum Member)

A reception immediately follows the program.  Space is limited; RSVP immediately to rsvp@campbellcompany.com or telephone Noel Dunn at 312-896-8884.

~ the donors forum team