Friday, February 1, 2013

The Feb. 1 Issue Of The NonProfit Times

It's a little hard to believe that we are already in the second month of 2013, but that's exactly where we are. The new month also means the arrival of a new issue of The NonProfit Times. What topics are covered in this edition? Let's take a look.

Special Report

  • Concerts Not Necessarily Music To Fundraisers' Ears: The recent 12.12.12 Concert for Sandy Relief made headlines for the money raised, but fundraising concerts haven't always been as successful. We take a look back at some previous shows, including the legendary Concert for Bangladesh.
  • Facebook Giving Platform Being Tested With Users: The popular social networking site rolled out a new giving platform recently. Will it revolutionize the way individuals donate to their favorite causes?
  • New CGAs Target A Different Level Of DonorsSome of the nation’s largest nonprofits are reporting fewer charitable gift annuities (CGA) in recent years amid historically low interest rates, but the CGAs they do receive are larger than in the past.
  • No More Laurels: There's no question Lance Armstrong lied all these years, but should his faults really negate the work of the foundation he founded? Our editor-in-chief, Paul Clolery, examines the case.
  • Magic Hamper ExecutivesMost nonprofits don’t have Magic Hampers. But, Magic Hamper syndrome can still afflict them. The most important and generic distinction in management is that between executives and managers and their differing time frames. Managers’ typical orientation to time is measured in weeks or perhaps months.
This is only a taste of the articles in the Feb.1 issue. If you want access to the full edition -- in print or digital form -- head to our subscription page.

Thursday, January 31, 2013

Ex-NY Politician Pleads Guilty In Nonprofit Theft Case

A former New York State Senator pleaded guilty Wednesday to charges that she stole nearly $88,000 from a nonprofit program that uses tax-payer money.

According to a report in The Wall Street Journal, Shirley Huntley (D-Queens) admitted to the court that she wrote $24,500 in checks from the bank account of an education nonprofit she helped start, The Parents Workshop. She said the money was used to buy gifts for her family members, as well as to pay her personal credit card bills.

The embezzling scheme started during her time in the State Senate, which began in 2007 and ended last year when she lost a re-election bid.

U.S. Attorney Loretta Lynch said in a statement that Huntley "used her knowledge of the system to steal funds intended to help some of her neediest constituents, lining her own pockets at the expense of parents, and ultimately their children."

She faces up to five years in prison, though no sentencing date was set as of this writing.

You can read the full story in The Wall Street Journal.

Wednesday, January 30, 2013

6 Ways To Build Your Social Media Audience

Social media has hung around long enough to no longer qualify as the "flavor of the month;" it now qualifies at the "flavor of the last few years and the foreseeable future." Yes, every business and nonprofit want to utilize a social media strategy these days, but there is a catch.

Sites like Facebook or LinkedIn can only be effective for your organization if you have an active audience. The good news is, attracting a few followers can often increase your potential audience exponentially as your friends spread the word to their own networks of friends, etc.

So how do you attract people to “like” your Facebook page, or follow your Twitter feed? Try these tips:
  • If you post it, they will come. If you’re launching a new blog or Twitter account, start by posting a few interesting things to show the audience what you hope to gain and that your resources might interest them.
  • How do you know what will interest the type of people you’d like to follow you? Ask them. Find a good representative sample of your desired audience and start a discussion with them about what kinds of posts they’d like to read.
  • Even with brilliant content, it’s difficult to attract supporters to a site that no one else is following. Ask your staff and other core supporters to follow your tweets, or “like” your Facebook page. Getting them to post comments or reply to your posts can help show an active community.
  • Add your social media profile information anywhere your contact information is given. A Facebook or Twitter logo on your website can link people directly to your pages.
  • People who already know you are more likely to join your social media communities than strangers, and you can reach people who already support your organization through email, print newsletters and other social media channels.
  • Social media is meant to be social. Participating honestly in the online conversation about topics of interest to your organization will build an audience more successfully than any other tip or trick. Post relevant comments that add to the conversation, tweet and retweet the resources other people offer, and watch your follower count grow.

Tuesday, January 29, 2013

Troubled D.C. Nonprofit To Release Audit

A Washington, D.C.-based nonprofit that had hundreds of thousands of dollars stolen by a former D.C. councilman will release an audit of its finances.

Keva Sturdevent, development director of the DC Children and Youth Investment Trust Corp., told The Washington Examiner that the organization will release its fiscal year 2010 audit in the next 30 days. Former Councilman Harry Thomas Jr., pleaded guilty last year to stealing $353,000 from the organization in 2010, as well as other charges of tax fraud. He was accused of transferring the money to his bank account for personal use and was sentenced to three years in prison.

"There is no excuse," Thomas said during his sentencing. "What I did was wrong." He went on to explain that he stole the money because he had a sense of "entitlement."

The D.C. Council has long pushed for the release of the 2010 audit, arguing that it could provide valuable insight into Thomas' activities. DC Children and Youth Investment Trust receives the majority of its funding from the District government.

 "We have an unaudited organization that has millions upon millions [of] dollars of D.C. funds," said Councilman Jim Graham, who oversees the organization as chairman of the council's Human Services Committee, on Monday. "The audit is going to tell the story."

Graham was one of the leading voices to get the trust to release its 2010 audit. He had previously asked Council Chairman Phil Mendelson to appoint him as a non-voting member of the nonprofit, and he was subsequently nominated for that position earlier this month.

Robert Bobb, the trust's chairman, criticized that decision in a letter to the council, insisting that his organization could only "prevent repeating the problems of the past by erecting a barrier between the Trust and elected officials."

Graham eventually removed his name from consideration.

The trust says it plans to conduct audits of 2011 and 2012 as well, but has not yet announced when those would be released. The organization's new executive director, Ed Davies, admitted to The Examiner that the trust isn't as independent from politics as it should be, and de-politicizing remains his top priority.

You can read the full story in The Washington Examiner.

Monday, January 28, 2013

Armstrong Dropped By Another Charity

The hits keep coming for Lance Armstrong, as the now-disgraced bicyclist has had his picture dropped from a charity he co-founded in 2007.

The Bethesda, Md.-based Athletes for Hope, which Armstrong co-founded in 2007 with tennis legend Andre Agassi and women's soccer star Mia Hamm, removed his picture from their website after he confessed to using steroids in an interview with Oprah Winfrey. The organization's mission is to encourage professional and Olympic athletes to connect with existing charities rather than founding their own foundations.

The story was first reported in The Wall Street Journal.

The nonprofit's chief executive officer, Ivan Blumberg, told The Journal that the decision was "mutual" and was decided immediately after the airing of Armstrong's interview with Winfrey. While his picture is no longer on the website, his name still is listed as a co-founder.

The charity also lost two other celebrity partners in the past few months: Women's tennis player Andrea Jaeger and baseball hall-of-famer Cal Ripken Jr. Jaeger made the decision to cut ties with the organization after Armstrong was first accused of doping by the United States Anti-Doping Agency (USADA) in August. Jaeger, whose Little Star Foundation aids children with cancer and other deadly diseases, said she could no longer be a part of the organization because its direction was different from the values that were important to her, presumably referring to its ties with Armstrong. Ripken left after Armstrong's interview with Oprah.

Other celebrities that remain with the nonprofit include former NBA player Alonzo Mourning, boxing legend Muhammad Ali, and skateboarding star Tony Hawk.

Athletes for Hope has also encountered funding problems in recent years, according to tax filings. A multi-year grant from the W.K. Kellogg Foundation totaling $2 million expired early last year. Blumberg also told The Journal that his salary, which was at a base of $250,000 with total compensation of $325,000 in 2011, will be reduced to $150,000. He said the lack of funding can be attributed to a weak economy.

Armstrong has had a difficult time since USADA first filed its charges against him. The foundation he created to promote cancer research officially changed its name to the Livestrong Foundation in November, and he eventually stepped down from the organization. He was also dropped by corporate sponsors Nike and Anheuser-Bush in October, the month USADA announced its decision to ban Armstrong from cycling for life.

You can read the full story in The Wall Street Journal.

Nonprofits Hurt By New Postal Rules

This is an article that appears in the newest edition of our NPT Weekly eNewsleter. For more stories like this, subscribe to it for free on our website.


Six of the United States Postal Service’s (USPS) new workshare discount rates, that took effect yesterday, are shallower for nonprofit mailers than for commercial mailers, and unfairly discriminate against nonprofits, contends the Association of Nonprofit Mailers (ANM), based in Washington, D.C.

Three of the new discounts -- high density letters, high density flats, and automated 5-digit flats -- are higher than the old rates, two categories (high density plus letters and high density plus flats) are new and the discount for non-automated 3-digit flats is slightly lower than the old rate. But the key issue is the discrepancy between the nonprofit and commercial rates.

According to ANM Executive Director Tony Conway, worksharing discounts are provided when mail is prepared in certain ways, such as presorting it by ZIP code, effectively taking some of the burden of sorting and transporting off the United States Postal Service (USPS). The goal is to create incentives to drive the most efficient mailing behavior.

The difference is less than 4 percent or $0.003 per piece for four of the categories (high density letters, high density plus letters, high density flats and high density plus flats), with auto 5-digit flats being 8 percent or $0.007 per piece and a 13.5 percent difference, or $0.007 per piece, for non-automated 3-digit flats.

“We saw that for certain types, nonprofits are receiving a lesser discount than commercial counterparts,” said Conway. “We called the Postal Service on that, raised the issue with the Postal Regulatory Commission (PRC) and filed comments (in November) saying the discrepancies are not allowed by law.”

Section 403(c) of U.S. Code Title 39 prohibits discrimination among mail users when it establishes fees unless it has a reasonable justification. The USPS claims it cannot equalize the nonprofit and commercial rates “without setting the nonprofit base rate higher than would be most efficient and preferable from a policy perspective,” according to PRS Docket No. R2013-1. Conway said the USPS’s argument boils down to setting rates being a complicated process for everything to work perfectly all the time. That argument does not hold water, said Conway.

“So the PRC, unfortunately, instead of pushing back on the postal service, chose not to do that and told the postal service they could implement the new rates,” said Conway. “From a nonprofit standpoint, they’re doing the same things commercial mailers are doing, and to be provided a lesser discount, that’s just blatant discrimination for no good reason.”

Diana Aviv, president and CEO of Independent Sector in Washington, D.C., said, “Independent Sector has long worked to ensure that nonprofit organizations receive equitable treatment under the law relative to their counterparts in the for-profit sector. The proposed worksharing discount is another example of the disparate treatment of nonprofit organizations that should be rejected.” Independent Sector was a signatory along with eight other organizations on a letter of protest that was sent to Rep. Darrell Issa (R-Calif.), chairman of the Committee on Oversight and Government Reform. Issa has previously helped to block legislation that would eliminate the nonprofit rates.

Conway said his organization is prepared to fight the new rates in court, but he hopes that will not be necessary. When the PRC produces its annual compliance determination report in the first quarter of 2013, Conway said he believes it will recognize and correct the oversight. “It appears it was just sloppy work by the postal service in designing new rates and inattention to the argument we raised,” he said.

That is in contrast to two other cases where Conway said the USPS deliberately kept the nonprofit sector out of worksharing discounts. The first time was 1980, when worksharing discounts were established. The USPS said the discounts were only available to the commercial sector. The organization Easter Seals took the USPS to court and won, and from that case ANM was born. In 1996, the USPS again tried to discriminate against nonprofits, said Conway. This time, ANM was the plaintiff and won the case.

If the PRC continues to accept the USPS’s explanation for why some discounts are lower for nonprofits, Conway said ANM will again go to court. “We hope to get it straightened out through the regulatory process, but we’re geared up to go to court and I’m confident we will prevail,” he said.

If the new workshare discounts are allowed to stand, said Conway, that would “drive more inefficiency and send the wrong signals.” It’s not so much a question of revenue foregone, he said, as it is not allowing discrimination against the sector. “We’re not talking about monstrous overpayment, but it’s the principle,” said Conway. “To not (correct the mistake), be called on it and just blow it off is wrong,” he said.