Philanthropy Front and Center - New York

From the Answer Desk: Contingency and Scenario Planning: What's the Difference and How Do Nonprofits Get Started?

A: Both are structured ways for organizations to think about the future. In the context of planning, the terms "contingency" and "scenario" are sometimes used interchangeably. In simple terms, a contingency plan can be described as your organization’s “Plan B” or "worst case scenario" and is often tied to something specific, like a natural disaster. They are also sometimes called business continuity plans or disaster recovery plans. Scenario planning, on the other hand, is a “strategic planning method expressly developed to test the viability of alternative strategies," according to Mal Warwick in his book, Fundraising When Money is Tight. Warwick suggests six steps for creating an effective scenario plan, starting with exploring answers to the question, "What keeps you awake at night?," to draw out fundamental issues, and concluding with testing your strategic choices using “what-if” reasoning. Warwick describes scenario planning in detail and goes on to suggest Peter Schwartz’s classic 1991 book, The Art of the Long View, for further reading. (Listen to our February 2009 podcast with Mal Warwick here.)

In the July 2, 2009 Chronicle of Philanthropy article “Worst Case Scenarios,” author Ben Gose advocates that forming a contingency plan can help a nonprofit navigate the recession more successfully. Offering tips ranging from setting priorities and identifying "trip wires" (actions to take when revenues drop, for example), Gose cautions that organizations must come to terms with the fact that “painful decisions will still have to be made.” However, Mr. Gose goes on to note that during contingency planning “a charity may find that a program it considered cutting is in fact worth saving, and that finding can make a compelling story for donors.”

Additional resources:

Financial Scenario Planning for an Uncertain Future
Slides from a presentation made by Emil Angelica at the June 2009 annual conference of Dance USA.

Nonprofits Assistance Fund Scenario Planning Worksheet
A "step by step guide to nonprofit contingency planning."

ScenarioThinking.org
Open community on scenario thinking and scenario planning where you can publish scenarios, reflect on the planning processes and share online resources about scenario planning in a democratic and inclusive manner.

Do you have a question? Ask Us!

Robert Bruno, Reference Librarian, Foundation Center-New York

From The Answer Desk: What Information Are Foundations Typically Looking for in Program Evaluations?

A: When accepting foundation grant dollars for your organization's programs and services, it is expected, and, in many cases, required, that you report to your foundation donors at the end of the grant period exactly what was accomplished, including a financial reporting of how the dollars were spent. Foundations are interested in receiving reported feedback about how your organization met the goals and objectives outlined in your proposal. Funding reports typically contain information about the overall success of the program along with detailed information about the activities offered to clients, your organization's methods (what did you do? what worked? what surprised you?), and progress made toward reaching the targeted outcome(s) or impact of the funded program.

What follows are a few online resources that provide more insight into program evaluation:

Aimed at the grantmaking community, the Evaluation Techniques Series at GrantCraft, a project of the Ford Foundation, includes information about several common evaluation techniques: participatory action research, collaborative inquiry, outcomes and evaluation, theory of change, collaborative inquiry, and ethnographic approaches to evaluation. Free registration is required to view the full-text documents.

To equip grantees with program evaluation skills for ensuring that their programs achieve their desired outcomes, the W.K. Kellogg Foundation makes available an Evaluation Toolkit, Evaluation Handbook, and additional resources.

The United Way's Outcome Measurement Resource Network offers information, documents, and resources for "identifying and measuring program- and community-level outcomes."

The Urban Institute and Center for What Works publication, Building a Common Outcome Framework to Measure Nonprofit Performance [PDF], suggests core indicators for 14 categories of nonprofit organizations and then expands the notion of common core indicators to a much wider variety of programs by suggesting a common framework of outcome indicators for all nonprofit programs. 

To locate additional resources, search our Catalog of Nonprofit Literature on the subject "Program evaluations."

To learn how to measure the impact of your organization's programs, register for our seminar, Outcome Thinking and Management: Shifting Focus From Activities to Results.

Do you have a question? Ask Us.

Katie Artzner, Online Librarian, The Foundation Center

From the Answer Desk: What do I need to know about collaboration and other kinds of strategic alliances?

A: In the current economic climate, nonprofit organizations are being urged now more than ever to work together in new and creative ways. Why?

• Demand for services is up along with competition for financial resources, making the drive towards efficiency increasingly important.
• Duplication of services is viewed as wasteful.
• Strategic alliances, like collaboration, are equated with cost-savings.  
• The complex issues that nonprofits address are presenting themselves on a grand scale, calling for scaled-up solutions.  

Gaining a basic understanding of the types of strategic alliances is a good first step in determining the fit for your organization. There’s general agreement that the types of strategic alliances follow a continuum, from those at one end that are informal to those at the other end that require high levels of intensity, complexity, and formality. The following types are based loosely on the work of Dr. John Yankey, Ph.D., Emeritus Professor, Case Western Reserve University:

• Endorsement: Providing approval or support of a concept or action already conceptualized or completed by another organization (letters of support).
• Co-sponsorship: When two or more organizations share (although not always equally) in the offering of a particular program or service. 
• Affiliation: A loosely connected system of two or more organizations with a similar interest(s).
• Federation/Association: An membership alliance of organizations established to centralize common functions. 
• Coalition: An alliance of independent organizations which usually share a political or social change goal. 
• Consortium: An alliance of organizations and individuals representing customers, service providers, and other agencies who identify themselves with a specific community, neighborhood or domain. 
• Network: An alliance of organizations that share resources for mutual benefit such as service provision. 
• Joint Venture: A legally formed alliance in which member organizations maintain joint ownership – (generally through a joint governance board) to carry out specific tasks or provide specific services. 
• Acquisition: An alliance in which an organization acquires a program or service previously administered by another organization.
• Divestiture: When one organization "spins off" a program or service to another organization.
• Merger: When one organization is totally absorbed by another.
• Consolidation: When two organizations combine to form an entirely new organization.

The Fieldstone Nonprofit Guide to Forming Alliances uses these categories, based on the work of Michael Winer and Karen Ray (Collaboration Handbook) and David LaPiana (Nonprofit Mergers Workbook).

• Cooperation: Informal arrangements and relationships with no change in organizational structure of participating entities.
• Coordination: More formal arrangements and relationships that focus on specific programs or projects and are accompanied by plans and a shared mission.
• Collaboration: Longer-term, formal arrangements and relationships where separate organizations are brought into a new structure with a shared mission.
• Merger: Arrangement in which two organizations become one.

The selected resources below will help you to learn more and understand the costs and benefits of strategic alliances.

Collaboration- Fieldstone Alliance
Provides free access to useful articles about and tools for planning nonprofit collaborations.

Collaboration Strategies for Nonprofit Organizations- curtishaxter.com
This article briefly examines the preliminary questions that all nonprofit organizations should address before any collaborative effort, then outlines combination strategies available to nonprofits.

Managing Collaboration Risks - Nonprofits’ Insurance Alliance of California
Explores typical collaborative relationships that nonprofits engage in and how to manage or avoid the risks associated with them. Published in 2002. [PDF]

The Reality Underneath the Buzz of Partnerships - Stanford Social Innovation Review
Article shares findings from a study of nonprofit partnerships and examines why most did not fulfill participants' expectations. Published in Spring 2005.

The following print publications can be found at the Foundation Center's New York library:

• Forming Alliances: Working Together to Achieve Mutual Goals by Linda Hoskins and Emil Angelica.
• Uniting for Survival by Don Haider.
• Time to Merge? Fundraising and Financial Implications by Priscilla Hung.

  Do you still have questions? Ask us.

  Katie Artzner, the Foundation Center's Online Librarian. 
  

From the Answer Desk: What is social entrepreneurship?

A:The term “social entrepreneurship” broadly encompasses ventures of nonprofits, individuals, and for-profit businesses that can yield both financial and social returns. While social entrepreneurship may be a newer addition to our vocabulary, it is not a new concept or endeavor. The Skoll Foundation provides more background on the concept of social entrepreneurship.

Social entrepreneurship can be translated into an earned income venture, such as selling goods or services, that allows a 501(c)(3) nonprofit organization to generate income and diversify its funding base, while providing positive impact in the community. For more information on starting a business venture within a nonprofit organization, visit Fieldstone Alliance's Tools You Can Use to assess whether you are ready to launch such a venture.

The concept of social enterprise also applies to civic-minded individuals, businesses, and other hybrid organizations that engage in for-profit ventures with a strong social bottom line. Social Edge, a program of the Skoll Foundation, is a "global online community where social entrepreneurs and other practitioners of the social benefit sector connect to network, learn, inspire and share resources."

Other web resources that address the concept of social entrepreneurship:

Idealist: What Is Social Entrepreneurship?
Summarizes the concept of social entrepreneurship from a number of different perspectives.

Fieldstone Alliance: Short- and Long-Term Approaches to Finding New Revenue Sources
Tips and techniques for conducting a feasibility study and market research on your target audience before launching your venture idea.

The Stanford Social Innovation Review
The Stanford Social Innovation Review offers strategies, tools and ideas for nonprofits, foundations, and socially responsible businesses.

National Center on Nonprofit Enterprise
Learn here about training, planning, financing and managing nonprofit risk.

Social Venture Network
Provides information and convenes conferences for charities and businesses interested in operation in a socially responsible and environmentally sustainable way.

Books on the topic include:

• Venture Forth! The Essential Guide to Starting a Moneymaking Business in Your Nonprofit Organization
• Social Entrepreneurship: A Modern Approach to Social Value Creation
• Mission, Inc.: The Practitioners Guide to Social Enterprise 
• Power of Unreasonable People: How Social Entrepreneurs Create Markets that Change the World
• The World We Want: New Dimensions in Philanthropy and Social Change

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

Have a question? Ask Us!

Katie Artzner and Sarah Jo Neubauer, online librarians at the Foundation Center

The Answer Desk Is Open. Ask Us!

Do you have questions about fundraising, nonprofit management, and related topics? We have answers and provide them fast. Our Ask Us service is available 24/7.

You can connect with a Foundation Center librarian and ask your question live, in real-time, Mondays, Tuesdays, and Wednesdays from 9:30 am to 8:00 pm, Eastern Time, and Thursdays and Fridays from 9:30 am to 4:30 pm, Eastern Time. Other times, you can ask by e-mail.

We've answered more than 90,000 questions since our start in 1998 and our fans regularly tell us what they think. So, if you have a question, join the growing number of satisfied customers who regularly Ask Us!

Katie Artzner, the Foundation Center's Online Librarian

From The Answer Desk: How Can Nonprofits Avoid or Address Financial Emergencies?

A: There is no one-size-fits-all answer to this question, but here are 10 suggested resources that may be helpful. If you have recommendations, please let us know by leaving a comment.

1. It is critical that your organization develop and closely monitor a sound fundraising plan that includes detailed outlines for securing a diverse array of support and revenue. Learn how at our free class, webinar, or full day seminar.

2. 20 Emergency Funding Sources for Nonprofits. From Fieldstone Alliance, this web page includes "sources that can be accessed quickly, usually within 30 days," along with this note of caution, "Not all of these sources are available to all nonprofits, and some of them carry great risk." The strategies included are detailed in these categories: cash flow management, contributed income, earned income, debt financing, and existing assets.

3. Adapting to Change: 22 Structural Strategies for Nonprofits. Also from Fieldstone Alliance, this web page includes 22 ideas "involving organizational change. When major external change happens, it’s important to look internally to revisit and, if necessary, revise your mission and approach in order to serve the community in the best way possible." Ideas, opportunities and action steps are displayed  in the following categories: general advice, modify mission, modify organization structure, and modify organization culture.

4. And Now for Something Different About Nonprofits and the Economy 1/1/09. This article from Jan Masaoka in Blue Avocado, advises, among other things, that organizations give themselves permission to "declare an emergency. An emergency doesn't mean people should panic...an emergency means considering the bold and wacky ideas that are either brand new or used to be off the table." She goes on to advise nonprofits to "ask for help even if you don't know what would help." 

5. Coping with Cutbacks. A book by Emil Angelica and Vincent Hyman that offers "immediate help with 185 specific cutback strategies." 

6. RFP Bulletin from Philanthropy News Digest. Broaden your search for funding. RFP Bulletin lets you search by subject through notices of awards that can be applied for immediately. You can activate a free e-mail subscription to RFP Bulletin and have it delivered weekly.

7. Foundation Directory Online Professional can be used to search for grantmakers that provide "emergency funds" using the "type of support" index. It is available by subscription or for free use at more than 400 Foundation Center locations. In addition, you should consider contacting any of your organization's current foundation supporters and asking for assistance.

8. Philanthropy Chat: How to Downsize a Nonprofit [podcast] features writer, educator, and nonprofit leader Michael Seltzer discussing cost-cutting, collaboration, and the hard question, "How can nonprofits handle workforce reductions when all else fails?"

9. Live From Navigating Your Nonprofit Through Challenging Times. Replay this live blog post and get play-by-play details from an April, 2009 seminar hosted by Business Volunteers Unlimited, The Center For Nonprofit Excellence and The Nonprofit Finance Fund. Topics include the importance of not being short-sighted in a recessionary economy and how to separate "symptoms" from "problems" within your organization.

10. Managing in Tough Times: 7 Steps, from the Bridgespan Group, advises nonprofits to make contingency plans for worst case financial scenarios, to identify who are the top performers at your organization and take steps to keep them that way, and to communicate openly and often with board, staff, and other key people about the organization's financial realities.

Do you have a question? Ask Us.

Katie Artzner, Online Librarian, Foundation Center

 

From the Answer Desk: What's the process for naming a new nonprofit organization?

Once you have obtained nonprofit incorporation information and materials from your state’s filing office, you need to choose a name that you like and that also meets the requirements of state law. Anthony Mancuso’s How to Form a Nonprofit Corporation(8th ed.) discusses this in detail; we’ve summarized some of his advice here.

In Chapter 6, “Choose a Name and File your Articles of Incorporation,” Mancuso states that “your corporate name is one of your most important assets,” and since it will be the primary way you will be identified by the community and other nonprofits, and will be used on your stationery, logos, web site, etc., “you should pick a name you’ll be happy with for a long time.”

Mancuso also points out that your name must be unique. It cannot be the same as, or confusingly similar to, a name on file with the secretary of state. Practical suggestions when selecting a name include words that broadly suggest 501(c)(3) nonprofit purposes or activities (“betterment”, “education”, “philanthropic”, etc.). Avoid words that signify a profit-making business or venture.

Once you’ve settled on a name, you'll need to check if the name is available. You may check online or by phone by going to your state’s filing office website; a few states will not do so over the phone, and you'll need to check by mail (a small charge for checking the name may be incurred). More tips in Mancuso’s guide include what to do when there’s a name conflict, how to reserve your corporate name, and how to protect your name once you’ve filed your articles of incorporation.

In his book How to Form a Nonprofit Organization(3rd ed.),  Mark Warda also suggests that you find out if a web address using your proposed name is available. This can be done at http://www.domainname.com/.

You may also want to read the Free Management Library’s Marketing: Naming and Branding section, which includes a link to the “3 Golden Rules of Naming” and other tips. Both of the books cited in this posting are available in all of our Foundation Center Offices; to search for related books, use the Catalog of Nonprofit Literature using the subject term “Nonprofit organizations--establishment and termination”. The Foundation Center also provides many FAQs on the topic of establishing a nonprofit organization.

Robert Bruno, Reference Librarian, Foundation Center-New York

From the Answer Desk: How can I find foundations that offer volunteer match programs?

Some corporate foundations award funding to nonprofits with which employees of their sponsoring companies have volunteered.  These are often called “Dollars for Doers” programs but are also referred to as “Volunteer Match” or “Volunteer Matching” programs.

In Foundation Directory Online, we use the Type of Support field term “Employee volunteer services” to indicate that the employees of the grantmaker's sponsoring company provide volunteer services. In making grants, many companies and company-sponsored foundations favor organizations with which their employees volunteer. Using the index phrase “Employee volunteer services” in your search will highlight corporate grantmakers that likely also have Volunteer Match programs.

You can also use the keyword search field to find foundations that have these types of programs.  Using the phrases “dollars for doers”, or “volunteer match*” (where the asterisk acts as a wildcard to find “match” or “matching”) are also effective in locating these programs, and can be used to supplement the results of your “Employee volunteer services” search.

For information on other types of matching gifts programs, we suggest you read our FAQs on the subject, including What are employee matching gifts?  The Council on Foundations’ What types of support do corporations provide to non profit organizations? is helpful as well.

Have a question?  Ask us!

Robert Bruno, Reference Librarian, Foundation Center-New York

From The Answer Desk: What is Earned Income?

A: Simply put, earned income is revenue generated from the sale of goods, services rendered, or work performed. One nonprofit example that most people have some familiarity with is Girl Scout cookie sales. If you have ever purchased a box, you have contributed to the earned income of the Girls Scouts organization. Why is earned income gaining popularity with nonprofit organizations? As factors like increasing competition and a flagging economy have caused gift income, like foundation grants or donations from individuals, to level off for some organizations, nonprofits are looking to diversify or expand their bases of support to meet growing needs and to better sustain their operations over the long term. New players entering the field with new ideas about how nonprofit organizations should address society's ills are also spurring increased interest in earned income and other forms of social enterprise.

Earned income can be viewed as one part of a diversified financial or fundraising plan for nonprofits. A good primer providing background information on earned income is Social Enterprise: Hype or Reality? from the Social Enterprise Alliance, which says:

Earned income ventures by nonprofits generally do not free a nonprofit from other types of revenue…

Earned income ventures have never generated limitless profit…

Launching and running a social enterprise is as risky as launching and running a business in the for-profit sector…

Social enterprise demands skill sets that may be lacking in a typical nonprofit...

Social enterprise has the added challenge of managing to the 'double bottom line' of both mission and margin…

Here are some additional resources to help you access services and get up to speed:

Web sites:

• Cleveland Community Wealth Initiative, a program of the Mandel Center for Nonprofit Organizations and Community Wealth Ventures
• The Institute for Social Entrepreneurs provides seminars, workshops and coaching services for social enterprises in the United States and around the world.
• New Directions in Fund Development, a tutorial from the Truman Heartland Community Foundation's Nonprofit Business Solutions

Books that can be borrowed from our library:

• Venture Forth 

• Mission, Inc: The Practitioners Guide to Social Enterprise

The Foundation Center offers a full-day seminar, Earned Income: Assessing Your Nonprofit's Revenue Options. Register for the upcoming session taking place on Wednesday, April 15, in New York.

Do you have a question? Ask Us!

Katie Artzner, Online Librarian, The Foundation Center

From the Answer Desk: How can I find a pro bono lawyer for my NYC-based nonprofit organization?

Answer: The New York Library lists several local organizations that provide pro bono legal help on its Community Resources page. The New York City Bar Associationis also a good resource to contact when looking for a pro bono attorney.

For even more resources to help you find an attorney, please read our FAQ: "Where can I find pro bono legal assistance for my nonprofit organization?"

Before consulting an attorney, it's always good to research your questions thoroughly and come well-prepared to the meeting. Find answers online at Stay Exempt, the IRS's web-based training covering tax questions for exempt organizations. You'll also find excellent legal handbooks in our library, including 650 Essential Nonprofit Law Questions Answered (John Wiley & Sons, 2005) and other legal books you can find yourself by searching the Foundation Center's Catalog of Nonprofit Literature.

Do you have a question? Ask Us!

Rob Bruno, Reference Librarian, Foundation Center-New York