Report: More Cities Seeking PILOTs

A new report from the Lincoln Institute of Land Policy revealed that at least 218 local governments have received payments in lieu of taxes (PILOTs) worth $92 million per year from about 490 nonprofits.

The report, titled "Payments in Lieu of Taxes by Nonprofits: Which Nonprofits Make PILOTs and Which Localities Receive Them," surveyed local government officials in 599 jurisdictions with the largest nonprofit sectors in 2011. Authors Adam H. Langley, Daphne A. Kenyon, and Patricia C. Bailin acknowledged that while PILOTs can refer to many different types of payments, their definition "excludes any payments from for-profit companies or public entities (e.g., housing authorities) and any payments from nonprofits that are not voluntary, such as fees."

Findings of the study included:

• Although more than 90 percent of all PILOT revenue comes from "eds and meds," college payments are found to be more important than those from hospitals. PILOTs from colleges and universities accounted for about two-thirds of payments, while hospitals contributed only a quarter.
• The Northeast accounts for about 75 to 80 percent of PILOTs, with the greatest activity coming in Massachusetts and Pennsylvania.
• Most nonprofits make fairly small PILOTs while most revenue generated comes from a small number of multimillion-dollar PILOTs. As a result, the average PILOT for all nonprofits ($292,952) is nearly 10 times larger than the median ($30,000).
• PILOTs generate little revenue in most cities, accounting for less than 1 percent of total general revenue in 165 out of 181 localities that contributed to the survey.
• Most PILOTs go to cities and towns, but at least seven school districts and four counties also receive PILOTs.

The NonProfit Times has reported on PILOTs in recent years. Most recently, we reported that Brown University agreed to double its payments to Providence, R.I., increasing the university's payments to the city to $31.5 million over 11 years. According to the Lincoln Institute Report, Brown is one of 10 nonprofits that contribute the most money to cities. The other organizations on that list include Harvard University, Boston University, Massachusetts General Hospital, Dartmouth College, Brigham & Women's Center, Massachusetts Institute of Techology, and Yale University.

If you are interested in reading the rest of the Lincoln Institute Report, you can view the PDF here.

Are You Ready For Volunteers?

Every fledgling nonprofit eventually reaches a point where they are ready to start accepting volunteers into their organization. When that time comes, it's important that you are properly prepared for the work that comes from managing these individuals.

Gail Nyberg, executive director of the Daily Bread Food Bank in Toronto, Canada, wrote in the book "Five Good Ideas: Practical Strategies For Non-Profit Success" that there are five techniques organizations should use when they are dealing with their first volunteers.

• Communicate clearly, broadly and often. Letting regular volunteers know what’s happening and making sure they understand how their efforts are furthering your work fosters a sense of engagement and keeps them coming back.
• Understand and forecast your volunteer needs. A program should serve your organization and advance your mission, not accommodate every volunteer’s every wish.
• Have clear and concise position descriptions. This can ensure genuine buy-in, with people signing up for what you need.
• Train your staff in volunteer management. This is an opportunity for professional staff development by offering management training to employees who might not otherwise have the experience.
• Institute a formal volunteer recognition process. Even small tokens of appreciation can add up to a system of rewards that acknowledge the people who make invaluable contributions to your organization.

Accepting the first volunteers can be a nerve-wracking experience for any nonprofit, but following the tips above will ensure that you have done everything you can to prepare. Have any other suggestions? Feel free to share them with us in the comments section.

The Summer 2012 Issue Of Exempt Magazine

If you are someone who is more interested in nonprofit finance issues rather than management or fundraising, The NonProfit Times' sister publication, Exempt Magazine, should be of interest to you. The magazine's Summer 2012 issue has just been released, providing new content related to the financial side of nonprofits.

Articles

• Social Impact Bonds Set Up Unique Venture Capital Market: Todd Cohen, frequent NPT contributor and publisher of Philanthropy North Carolina, writes about how social impact bonds could potentially help take effective social programs to scale by tapping into private capital.
• Associations Can Run Afoul Of Anti-Trust Rules: A little background about anti-trust laws by Robert Davis, legal counsel at Venable LLP. This is a must read for those who still aren't quite sure how these laws work.

Column

• Create A High-Performing Board: The vast majority of nonprofits have great, dedicated and committed executives and wonderful individual board members. Yet, one of the most common questions asked is “how do we create a high performing board as a whole?” Dennis Miller has the answers in this column.

These are not all the articles in the Summer 2012 issue. If you want to see all the stories either online or in print, head to our subscription page and get your copy of Exempt Magazine.

PTA Sues For-Profit Rival

The National Parent Teacher Association (PTA) filed a lawsuit against one of its for-profit rivals, accusing it of attempting to steal its members.

According to a report on CBS News, the Chicago-based PTA filed the suit Wednesday in a U.S. District Court in Chicago against PTO Today. The organization claims that PTO engaged in trademark infringement, false advertising, and deceptive trade practices in attempts to siphon its members. Once boasting 12 million members during its prime, the PTA has seen its membership reduce by half that.

In a statement posted on it's website, PTA president Betsy Landers said that School Family Media, PTO Today's parent company, attempted to confuse the public into thinking the company had a relationship with the PTA in order to get advertising for their website and magazine.

"PTA has no issue with any for-profit company that wants to provide products and services to PTA and its members," said Landers in the statement. "However, we do strenuously object to School Family Media inferring it has a relationship with PTA that does not exist and, at the same time, disparaging PTA to drive business their way."

The suit also accuses PTO Today and School Family Media of making false statements about the PTA.

PTO Today founder and CEO Tim Sullivan denied the accusations, telling The Associated Press that PTA's membership started to decline before his company was in existence. PTO Today was founded in 1999, and it offers insurance, resource kits, training, and other advice to independent parent-teacher organizations.

You can read the full story on CBS News' website.

19 Ideas To Prevent Cyber Attacks

Remember the good old days when the biggest security concern for businesses was someone stealing from the petty cash box? With most organizations relying heavily on the Internet, another concern has popped up: Cyber Attacks.

Online crime can have disastrous results for individuals and nonprofits. All it takes is one security flaw in your system, and valuable (and often confidential) data could go missing. There are no ways to completely immunize yourself from cyber attacks, but there are ways to make sure you are as safe as possible.

During a recent Risk Management and Finance Summit for Nonprofits sponsored by the Nonprofit Risk Management Center, George E. Constantine III of Venable LLP in Washington, D.C., discussed the danger of cyber attacks, and he offered a look at protective measures:

• Dual Controls: Have at least two persons in charge of certain accounts, cash collection and cash payment systems.
• Internal Internet Use Policy: Make it good, follow it closely and include telecommuting.
• Have a privacy policy.
• Use Payment Card Industry (PCI) standards for data security.
• Software: Keep all software, especially security and financial, up to date.
• Hardware: What is allowed to connect to your system?
• Conduct employee training regularly.
• Know what to protect.
• Control access privileges, change passwords, use best available authentication.
• Free protections.
• Identify responsible manager in case of breach.
• Assess risks and vulnerabilities; establish a response plan.
• Train employees to identify and report.
• If problems occur, think of insurance, statutory obligations and public and client/member relations.
• Note that almost all states have data breach notification laws.
• Comply with laws of states of affected individuals, not just where the organization is located. Statutes will dictate content, method and deadlines.
• Generally, the burden is on the "owner or licensor" of data.
• Do background checks.
• Support whistleblowers.

Washington Lt. Gov. Grew Nonprofit On Taxpayer Money

Washington Lt. Gov. Brad Owen and his staff used taxpayer-funded time to help conduct the operations of the nonprofit that he funded, according to documents obtained by The Associated Press.

Strategies for Youth (SFY), an anti-bullying nonprofit, was shut down last year in part because of costs and Owen's other work as Lt. Governor. Before that, however, the AP found that Owen had for years made the organization an extension of his office, using taxpayer-funded time to run its operations. He also worked with lobbyists to raise money for the nonprofit. In one case, an Owen aide made plans to honor a lobbyist who donated to the organization with awards at a charity dinner and auction.

Owen told the AP that he saw no conflict of interest in asking lobbyists to raise money for the organization, saying that SFY's goal of helping kids is the same goal of his office.

Although Owen received no pay for his role as president of SFY, his wife, Linda, was paid a salary of $25,000 during the span of a few years. She was the only person receiving a salary, and her pay accounted for 10 percent of SFY's expenditures. The nonprofit also provided Owen and his family with a number of benefits, including the use of a $33,000 truck. In addition, Owen's staff repeatedly organized fundraisers for the organization, including one in 2010 called "Everyday People Doing Extraordinary Things."

E-mails from within Owen's office indicate that his staff spent hours doing fundraising work for SFY. One staffer worked more than 100 hours for the nonprofit in recent years. Owen initially denied reports of his aides doing fundraising work from the office but, after being shown e-mails by the AP, he acknowledged one individual may have made mistakes by conducting SFY activity from the office.

When Owen was first elected as Lt. Gov., he and the charity signed an agreement to work together and share resources. That contract was drafted with the help of Senate lawyers, according to Owen, who is currently running for re-election against Republican Bill Finkbeiner.

You can read the full story in The Associated Press.

Moving From Annual Gifts To Planned Gifts

Planned giving campaigns can provide a big boost to a nonprofit's fundraising, but it's not exactly a walk in the park to start such a program. That's why Judi Smith of Funding Services Now and Dianne S. Johnson of Endowment Builders advised nonprofits to build their campaign off something that already exists as a proven fundraiser for most organizations: Annual giving funds.

Speaking during the Association of Fundraising Professionals’ 49th International Conference on Fundraising, Smith and Johnson explained that there are certain prospects that are more likely to support planned giving campaigns. These donors are:

• People who support the mission.
• Regular donors of small gifts.
• Donors of major gifts.
• Older donors.
• Volunteers.

Many of these individuals are probably already donating to your organization's annual fund, so it's worth trying to convert them to planned giving. Smith and Johnson said to consider the following ideas when trying to build your program from an annual fund:

• Start with an Endowment or Planned Giving committee (with each member to make their own planned gift).
• Target an event to include planned giving prospects.
• Review the database for a mailing program to a planned giving prospect group.
• Mail to existing members to reconfirm gifts and survey them.
• Look at offering charitable gift annuities.

Webinar: Is It Time To Change Your Accounting Software?

What are the top accounting issues facing your organization today? Answer our quick two-question survey on this subject, the results of which will be revealed during the webinar on Wednesday.

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Are you struggling with financial reporting and analysis? Are excel driven manual processes draining your accounting team’s productivity? It’s time to consider new accounting software for your nonprofit, but for what should you be looking?

In The NonProfit Times' latest webinar with Intacct Corporation, all the information you need to decide what type of accounting system your organization needs will be discussed. Speaking during the event will be Bob Blake, founder of Xanergy, and Lisa White, senior channel executive at Intaact. Both individuals have decades of combined experience in the accounting software industry for nonprofits, and their tips will be valuable to showing how to simplify the process of selecting new software for your organization.

Here are a few of the topics that Lisa and Bob will be touching on during the webinar:

• Determine what you need from a new accounting system.
• Make sure the system you select maximizes financial transparency and accountability to the board.
• Find the right vendor by following these 5 best practices.
• Take advantage of new options made possible by cloud computing.
• Calculate the ROI you can expect from a new cloud financial management and accounting system.

As always, it is completely free to register for this webinar, which will begin on September 26 at 2:00 PM EST. Sign up today and learn how you can get your organization on the right track when it comes to accounting.