Philanthropy Front and Center - New York

El Foundation Center en español

This post is especially for our Spanish-dominant readers, and we invite all of you to share these FAQs with Spanish-speaking colleagues.

Hoy en día, las organizaciones que trabajan en el ámbito civil necesitan información corriente acerca del manejo de organizaciones y de sus finanzas, la recaudación de fondos, y otros temas relacionados con una gestión exitosa. También las personas interesadas en cursar estudios universitarios, realizar proyectos independientes, o conseguir apoyo financiero para otros propósitos necesitan información específica.

Para todos ellos, el Foundation Center ofrece preguntas y respuestas en español con enlaces a recursos adicionales.

Organizaciones: Esta sección incluye los siguientes temas:

- Cómo constituir una organización nueva
- El proceso de recaudar fondos de fundaciones y corporaciones
- La redacción de propuestas
- Las colaboraciones y alianzas estratégicas
- El patrocinio empresarial

Particulares: Para los que buscan información en estas areas:

- El apoyo financiero para cursar estudios universitarios
- Becas para estudiantes internacionales
- Asistencia financiera para cubrir costos de urgencia
- Asistencia financiera para personas con discapacidades
- Apoyo para empezar un negocio o pequeña empresa

For these and a complete list of FAQs in English, please see the Get Started section of our web site. And if you don’t find the answer here, Ask Us.

Pulse Check 3: How Are Nonprofits Doing?

As a follow-up to earlier Pulse Checks posted by our Cleveland colleagues in March and July, here is another round-up of the latest surveys and studies indicating how the nonprofit sector is handling the effects of the economic downturn.

Glass Half Full or Half Empty? Results of GuideStar's Latest Nonprofit Economic Survey (August 2009)
GuideStar’s most recent nonprofit economic survey takes a look at the financial health of charitable organizations from March-May 2009. They found that since the last update, covering October 2008-February 2009, the percentage of nonprofits reporting decreased contributions has remained steady at 52%. Other findings showed that:

• 18% of responding nonprofits saw their contributions increase, while 29% reported that their contributions had stayed about the same from the previous survey period.
• Nonprofits reported that the decrease in giving was the result of the following:
  • Fewer individuals gave (69%)
  • Gifts from individuals were smaller (68%)
  • Corporate gifts were smaller (38%)
  • Private foundation grants were smaller (37%)
  • Read more>>

Volunteering in America: Research Highlights (August 2009) [PDF]
The Corporation for National and Community Service collects information on the American volunteer landscape in an effort to track changes and developments that may be useful for civic leaders and nonprofit organizations. Some of the key findings showed that:

• In 2008, 61.8 million Americans or 26.4 percent of the adult population contributed 8 billion hours of volunteer service worth $162 billion, using Independent Sector’s 2008 estimate of the dollar value of a volunteer hour ($20.25).
• As the economy slows and nonprofit organizations struggle to provide services on smaller budgets, volunteers become even more vital to the health of our nation’s communities. Between September 2008 and March 2009, more than a third (37%) of nonprofit organizations report increasing the number of volunteers they use, and almost half (48%) foresee increasing their usage of volunteers in the coming year. Almost no nonprofit organizations are showing a decrease in their volunteer usage.
• Volunteers were much more likely than non-volunteers to donate to a charitable cause in 2008, with 78.2 percent contributing $25 or more compared to 38.5 percent of non-volunteers.
• Read More [PDF]>>

Nearly 30% of Nonprofit Leaders Took a Pay Cut This Year; Pay in 2008 Grew Quickly (Sept. 2009)
The Chronicle of Philanthropy conducted a survey of 325 organizations that raised the highest amounts of donations from private sources in 2008, as well as grantmakers holding the highest assets that year. The results of the survey revealed that:

• 57 charities and foundations—29 percent of the 195 groups that responded—reported that their top executive had taken a pay cut this year due to the recession, declined raises or bonuses, or had his or her pay frozen. The median pay cut was 10 percent.
• The median compensation for chief executives at the organizations surveyed was $361,538, based on information from 253 groups that provided data for both 2007 and 2008. In 2007 the median compensation was $330,395.
• Read more>>

Have you read other enlightening reports and survey findings? Tell us about them.

Katie Artzner, Online Librarian, Foundation Center

Listen! David La Piana Discusses How Nonprofits Should Approach Strategic Restructuring

David La Piana, author of Strategic Restructuring: Mergers, Integrations and Alliances, recently sat down with Janet Camarena, Director, Foundation Center-San Francisco, to talk about best practices in how nonprofits should approach collaborations, mergers, and other types of partnerships. Listen>>

Philanthropy New York and the Foundation Center Release New Study on Diversity in the Nonprofit/Philanthropic Sector

The report, Benchmarking Diversity: A First Look at New York City Foundations and Nonprofits, examines the racial, ethnic, and gender demographics of both foundations and nonprofit organizations in New York, as well as, to a limited extent, survey results on sexual orientation and people with disabilities in these organizations.

In addition the diversity of the staffs and boards of the foundations and nonprofits themselves, the study looks at other measures of diversity focus, including whether organizations have policies regarding board and staff diversity, whether foundations have policies regarding grantmaking diversity, and the actual proportion of grants awarded to specific population groups.

Ronna Brown, president of Philanthropy New York, finds that the report "... provides valuable data about the makeup of foundations and the organizations they fund; it's a service to our members and others who care about philanthropy, so they can have informed conversations about how to make and measure progress in the diversity of their organizations."

Benchmarking Diversity: A First Look at New York City Foundations and Nonprofits is available for download at www.philanthropynewyork.org or at www.foundationcenter.org/gainknowledge/research/specialtrends.

CRE Executive Director Hotline Helps Managers Get Answers by Phone

Funded by a grant from the New York Community Trust, a new Executive Director Hotline from Community Resource Exchange provides free practical advice to nonprofit leaders who need answers to management questions. Call 917-344-6678 during business hours. A flyer describing the hotline’s services is available on CRE’s web site.

Susan Shiroma, Senior Librarian, Foundation 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 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. 
  

Listen! Peter York Discusses What Makes Nonprofits Sustainable

Peter York is senior vice president and director of research for TCC Group, a national consulting firm that provides services to foundations, corporations involved in community work, and nonprofit organizations. In this recent interview with Charlotte Dion, library director at the Foundation Center-New York, he shares the results of new data collected from more than 700 nonprofits and discusses common characteristics of successful organizations. Listen!

Tips for Nonprofit Survival from Grassroots Fundraising Journal

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

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

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

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

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

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

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

Originally posted by Kayron Bearden, Reference Librarian, Foundation Center-Atlanta 

Listen! Michael Seltzer Discusses How to Downsize a Nonprofit

Writer, educator, and nonprofit leader Michael Seltzer brings more than forty years of experience to this conversation about sensitive issues raised in his recent PhilanTopic post, Strategies for Hard Times: How to Downsize a Nonprofit.

Sitting down with Cynthia Bailie, director of the Cleveland office and special online initiatives at the Foundation Center, Mr. Seltzer circles the conversation about cost-cutting, collaboration, and staff development back to the hard question, "How can nonprofits handle workforce reductions when all else fails?"  Listen!