Nonprofit, Founder Ordered To Pay Employee After Racist Rant

A federal jury in New York ruled that a nonprofit and its founder must pay a former employee $280,000 after she was subjected to a rant using racial slurs.

According to a report on CNN.com, the ruling stems from a lawsuit filed by Brandi Johnson against STRIVE, an employment center in East Harlem section of Manhattan. Johnson claimed in her suit that STRIVE’s founder, Rob Carmona, repeatedly harassed her, culminating in a rant that used slurs against African-Americans. Johnson, who is black, said in court that the incident was the last straw for her. She sent a formal complaint to the organization’s CEO, Phil Weinberg on April 11, 2012 but was allegedly told that she was being "out of line" and "emotional."

Johnson was fired two months later, which she alleges was done as retaliation for her complaints.

The jury ruled Tuesday that Carmona, who founded STRIVE in 1984, must pay Johnson $25,000 and the organization must contribute $5,000 in punitive damages. This comes a week after jurors awarded Johnson $250,000 in compensatory damages.

"We are disappointed by the verdict, as we do not believe that it comports with the full facts applicable to the case," said Carmona's lawyer, Diane Krebs, via a statement. "Nevertheless, we respect the jury's decision and the judicial process. We are exploring all our options moving forward, including appeal, and look forward to the judicial process taking its entire course."

While testifying last Friday Carmona, who identifies as black and Hispanic, tearfully tried to explain his actions. He explained, "I come from a different time." According to STRIVE, Carmona spent his early teenage years in Harlem addicted to drugs and in and out of prison. He found solace in an alternative incarceration program where he cleaned up and eventually attended college. The center's website says that it has helped nearly 50,000 individuals across America enter the workforce.

For her part, Marjorie Sharpe, Johnson's attorney, called the decision "important" because it is the first case where "we essentially have the n-word on trial."

"There are a number of cases where the n-word has been used in a workplace, but usually it's been done between people of different races, and when we're having that discussion, it seems that it's clear that if you're not African-American and you use the n-word, absolutely it's insulting," continued Sharpe.

You can read the full story on CNN's website.

11 Tips To Limit Fraud At Your Nonprofit

Unless someone develops a way to stop humans from having feelings of greed, nonprofit leaders are going to have to continue to be vigilant about fraud prevention. At a recent AICPA Not-for-Profit Industry Conference, the best ways to do this were discussed.

At the conference, Mitchell Lewis, David McRoberts and William Mellon said that while it is nearly impossible to stop fraud, there are ways to reduce the chances it will happen to you and to limit the damages if it does. They said that one of the main causes of fraud is a work environment where lack of oversight and too much trust are rampant.

With that in mind, Lewis, McRoberts, and Mellon offered five suggestions for organizations to practice:

• Fraud governance structure, including tone at the top, a zero tolerance policy, documented fraud policy statement and a code of ethical behavior.
• Regular education and training.
• A fraud tip line.
• Completion of a fraud assessment to identify fraud exposures and related events that require mitigation.
• An investigation and response reporting process.

In terms of specific anti-fraud controls, they suggested:

• Vendor bidding process;
• Completion of background and reference checks;
• Dual signatures and levels of approval;
• Segregation of duties;
• Mandatory vacations; and,
• Internal audits and use of Computer Assisted Audit Techniques (CAATs).

Ex-Nonprofit Director Sues Indiana Mayor

The former head of a nonprofit in Hammond, Ind., has filed a suit against the city's mayor and the organization over allegations that she was wrongfully fired.

According to a report in the NWI Times, Carlotta Blake-King alleged that the defendants -- including Mayor Thomas McDermott Jr., City Councilman Anthony Higgs, and United Neighborhoods, Inc. (UNI) -- conspired to remove her from her position as director at UNI in retaliation for her candidacy for City Council.

Blake-King ran an unsuccessful campaign against Councilman Higgs in 2011, whom Mayor McDermott supported.

For his part, McDermott said in a statement Monday that Blake-King's allegations are "completely untrue," and that her firing was due to her "unsatisfactory" performance as director of the nonprofit agency, which is partially funded by the city's Department of Planning and Development.

According to the complaint filed by Blake-King, she was fired after an alleged "special meeting" of UNI's Board of Directors, where she was allegedly "berated" by Phil Taillon, executive director of the Department of Planning and Development, over her character and performance. The complaint also alleges that Nicole Bennet, an attorney, stated during that same meeting that Blake-King's candidacy for office while holding the position of director violated a federal act that bars certain employees from taking part in partisan politics.

Blake-King, through her lawsuit, is seeking the wages and benefits she would have earned had she not been fired from UNI.

You can read the full story in the NWI Times.

California Considers Nonprofit Mismanagement Bill

The California state Legislature is considering a bill that would give the state attorney general's office more power to crack down on nonprofits that are found to be mismanaging charitable funds.

California Watch reported today that a bill by Assemblyman Mike Feuer (D-West Hollywood) would give the attorney general the ability to take legal action against a charity or fundraiser if it fails to provide the required documents or makes a false statement in application or report. Current law requires the state to prove that there was intent to deceive before taking action.

Organizations would be given a penalty of up to $1,000 per violation after a five days' notice. The bill passed the Assembly, and will be heard in the Senate Appropriations Committee today.

According to analysis by staff from the Assembly Judiciary Committee, the attorney general's office is unable to prevent fraud from occurring with its current powers. The report claimed that this is the case even in instances when concerns are raised about a nonprofit before charitable donations are lost.

The state of California has dealt with many cases of alleged fraud in recent years. In 2010, the attorney general's office reached a settlement with the Association for Firefighters and Paramedics Inc. The state accused the Santa Ana-based organization of spending thousands of dollars meant for burn victims on a Caribbean cruise, trips to resorts, and other personal expenses. The nonprofit denied any wrongdoing in the case.

Bill AB 2327 is very similar to laws that are already in place in other states. The one difference is that the law, if passed, would require fiscal sponsors of charities to have directors' and officers' insurance in case they lose the money the are managing.

You can read the full story in California Watch.

Management Reporting And You

A nonprofit might have the greatest plan in the world, but it's still just a plan at the end of the day. It has no more guarantee of success and is only potential. To help reach that potential, good oversight is needed to ensure that the plan is followed as closely as possible.

This is where management reporting comes into play. These are a series of reports that detail how the nonprofit is doing. According to Howard Berman in “Making a Difference,” performance reporting is just a subset of an overall, larger, management reporting performance assessment and evaluation function.

Berman wrote that to successfully complete such a report, the following six questions must be answered:

• Is the enterprise doing what it said it was going to do? Is it executing its operating plan, producing the anticipated outputs, on time and on budget?
• Is the enterprise doing what it said it was going to do efficiently? Is cost divided by output at least continually improving -- if not, at an absolute best practice?
• Are the outputs that the enterprise is producing achieving the expected outcomes? Is it achieving the expected results -- or benefits for the involved stakeholders?
• Are the realized outcomes being achieved in an efficient manner? This is a combination of questions 2 and 3.
• Are the outcomes producing a significant impact? Are they producing a result that would not have otherwise been achieved?
• Is the effort sustainable? Can it be continued or will it fail of its own weight, due to either financial and/or operational imbalance?

Mission Statements And Your Belief Systems

Everyone involved with nonprofits know that mission statements are essential for an organization's existence, but do they know exactly what needs to be included?

In his book "Protecting Donor Intent," Jeffrey J. Cain wrote that the best statements go above and beyond what is required. They describe the principles and beliefs that inspire your philanthropy in addition to the main goal of the organization. Whether you think it's fair or not, your belief systems play an important role in how people perceive your organization.

Cain wrote that it's not enough to simply state the beliefs that are behind your goals. You must explain them so that those carrying out your mission can consider them. He recommended asking the following eight questions about your beliefs when crafting a mission statement:

• Are you religious? Do you want your faith to be reflected in your philanthropy? If so, how?
• What are the ideas, traditions, persons, events, and circumstances that shaped you as a person?
• Why are you establishing a philanthropic entity? What are your motivations?
• What would be the worst thing that could happen to the assets you’ve dedicated to the charity?
• What good are you trying to achieve?
• How important is family involvement to you?
• Over time your values might come into conflict with each other, with your heirs, or with your society’s changing mores. How should such matters be resolved?
• What parts of your foundation’s mission and grant-making would you like to remain constant over time? What aspects are nonnegotiable?

8 Leadership Dos And Don'ts

A nonprofit is unlikely to have any success without effective leadership. Everyone’s definition of a leader is different but there are some common threads, according to Emmet D. Carson, CEO and President of the Silicon Valley Community Foundation.

In “Nonprofit Management 101,” Carson laid out the qualities that all leaders should and should not have. The direction of your organization will ultimately determine the specific characteristics you should express, but Carson wrote that the following eight factors shouldn’t be ignored, regardless of the situation:

• DO lead consistently with passion and explicitly stated organizational values to inspire those around you.
• DO insist on a comprehensive annual evaluation.
• DO learn equally from outstanding and mediocre leaders.
• DO cultivate the art of active listening.
• DON’T ever surprise your board.
• DON’T avoid confronting the –isms of racism, sexism, and ageism in your organization.
• DON’T confuse delegating with managing.
• DON’T rely on a one-size-fits-all leadership style.

7 Secrets To Boosting Your Online Fundraising

There is no question that online fundraising has become a very popular method for nonprofits that are trying to increase their revenue and donors. Even though it's still not as dominant as traditional means, it has seen steady growth over the years -- the most recent Blackbaud Index of Charitable giving saw it increase for the 12th month in a row.

If your nonprofit is not seeing as much success from online giving, Frank Barry -- Internet strategy  manager for Blackbaud in Charleston, S.C. -- has some tips for you. He recommended seven ideas that will improve your organization's online fundraising efforts:

• Look at Web Traffic: Start by scrutinizing your web traffic. Find out how many people and how often they are visiting your organization’s website each month and if they are visiting your key online fundraising pages. Once you learn more about your web traffic you can make intelligent decisions about how to optimize your website to achieve the best online fundraising results.
• Pay Attention to Referrals: Learn where your visitors are coming from. Are they being driven to your page by social media, search engines, or partner websites? Some 40 percent of your online traffic should be from search engines, so enter your organization’s name into a search engine and observe where your site falls on the list of results. If it is not first, improve your website promotion and educate yourself about making the site easier for potential donors to find.
• Make the Ask: Make sure you have incorporated a specific online ask. The ask should be accompanied by a precise message tailored to the demographic you are targeting.
• Make the RIGHT Ask: Analyze what you request of your donors. Is your ask always the average of your total online fundraising revenue or does it vary with each donor adjusting based on the donor’s giving history? Being smarter about your ask, if executed properly, can help you receive more.
• Know Your Audience: Audience analysis should be a key part of your online strategy, and it should be your goal to put the needs of potential donors first. While you might think your website is easy to navigate, others who do not know a lot about your organization might not find it as easy. Have friends or peers who are not familiar with your site look at it and use their feedback to improve.
• Keep Messaging and Branding Unified: Images or messages should complement each other and organizations should personalize any literature to display ownership and stay on message. It is important to make all your online communication uniform, which will streamline the donor’s experience and will make a return or referral more likely.
• Follow Up Relentlessly: After receiving a donation, make sure to follow up with the donor by updating them with your organization’s progress and show them how their gift has made a difference.

Five Re-Branding Tips

There comes a point in the life of most nonprofits when its previously healthy brand becomes stale. Whether it's become of some external controversy or a normal change in attitudes, organizations sometimes have to consider re-branding.

This was the case with the organization formerly known as Gifts In Kind International (GIKI). The Alexandria, Va.-based nonprofits changed its name to Good360 a year ago, part of a re-branding effort to refresh their image after 30 years. Good360 also completely revamped its business model as part of that effort.

Re-branding doesn't always have to be that extreme but, whatever form it takes, the results won't come instantly. As Nick Saul wrote in his book "Five Good Ideas: Practical Strategies for Non-Profit Success," change takes time. If you are one of those nonprofits that is considering fundamental change to your brand, Saul suggested five things you can do to re-imagine your organization:

• Listen. It sounds obvious but it’s not just a matter of “sending out feelers” every few years. It must be habitual, part of your organizational DNA.
• Create a plan, but don’t always stick to it. A plan is always a work in progress so don’t get so caught up making it that you stall before taking action. “Don’t let perfect be the enemy of good.”
• Embrace your inner entrepreneur. Nonprofits need to be as nimble and opportunistic as possible. Your landscape of service delivery can shift quickly and unforeseen opportunities will arise. You must be willing to be bold and think big.
• It’s competitive out there. You must be able to differentiate yourself from others. Be clear about the difference your organization is making and why you have no equals in the pursuit of your mission.
• Contribute to public policy conversations. Advocacy doesn’t turn people off -- it makes you relevant.