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You are here: Home / Archives for Casey Crowell

A Seismic Shift Underway in Board Service

May 3, 2021 by Casey Crowell

by Sharon Danosky

In early March, Anne Wallestad, President and CEO of BoardSource published an article in the Stanford Social Innovation Review titled the Four Principles of Purpose-Driven Boards (see link below).  While the title is unassuming, the content is not.  The principles are:

  1. Purpose Before Organization
  2. Respect for Ecosystem
  3. An Equity Mindset
  4. Authorized Voice and Power
Four Principles of Purpose Driven LeadershipDownload

What she is forecasting is a ripple effect leading to a sea change – one that has been in motion long before COVID-19 hit.  COVID-19, the murder of George Floyd, the vast economic and social disparities on display during the pandemic and the devaluation of essential workers has collectively exacerbated, accelerated and amplified inequities in our systems and shone a spotlight on the work we all need to do.

The traditional view of nonprofits and board service — an emphasis on fundraising; organizational rather than community perspective; focus on size and market share, or counting people served instead of impact as a measure of success — is out of sync with the lived realities of many of the communities we are meant to serve.  Instead, a community-based approach to service, more participatory and equitable philanthropy, greater representation and collaboration rather than competition are not just new models of service, they represent how our society and sector is changing.  While nonprofits are shifting their framework, the question is whether boards are keeping pace with this shift or still functioning in a model which is fast becoming antiquated.

  • Do board members have the knowledge and been provided a lens through which they can evaluate the services their nonprofit provides? 
  • Is the board comprised of community members and are the voices of people with lived experiences being heard at every meeting and with every decision made?
  • What is the Board’s role in fundraising, and is it aligned with objectives around community inclusion or fall back to the give, get or get off model which sidesteps community participation?  
  • Does the board engage in meaningful discussions, such as who does the nonprofit serve and who is falling through the cracks?  Do they have the data and demographics to make good decisions and the context in which to make them? 

These represent significant shifts in how we will be experiencing board service moving forward.  They especially come into play as new board members are being recruited, and the composition and structure of the board is being considered. 

I had the privilege of moderating a webinar a couple of week ago for the Community Foundation for Greater New Haven and the Valley Community Foundation, with a panel comprised of younger men and women of color, from local communities, sharing their experiences on various boards.  I couldn’t help but notice that the conversation didn’t discuss radical changes, but important nuanced changes in terms of how we look at the board experience.  For example, the importance of the Board Chair applying a racial equity framework, recruiting practices that don’t rely on a matrix but encourage a good dialogue about the nonprofit’s purpose and values, an agenda that is not about Robert’s Rules of Order but instead promotes relevant discussion around strategy.

Navigating these changes will not be easy, but it is essential.  The issues and problems in our society — from childhood poverty, to housing, food insecurity, inequitable pay, domestic violence, climate change, environmental justice and more — will not stand still.  It will require that we bring our best, most representative and inclusive selves together to address them.  Boards should not shy away from difficult conversations, but create space at every board meeting where they can be held.

Filed Under: Blog, Boards & Governance

What are Functional Expenses and Why Do They Matter to Nonprofits?

April 6, 2021 by Casey Crowell

By: Susan Rosati                               

The IRS requires nonprofits to divide their expenses into three categories that include program, management and general, and fundraising for filing the 990 tax return. Essentially, functional expenses describe the purpose of any expense. This is different as compared to natural expenses, which are based on the type of payment such as supplies or insurance.

Program expenses are the expenses needed to run the core mission of the nonprofit and are usually the biggest group. These are the costs that are delivered through programs or services. They also include direct or indirect program expenses. Direct expense are tied directly to the program, such as staff who deliver your services. Indirect expenses, such as utilities or billing services, are often allocated because they do not tie to any one particular program. Traditionally, donors prefer nonprofits that spend most of their money on programs and do not like funding “overhead.” However, during the pandemic we have seen a significant shift away from that perspective as more donors rely they need to support the entire organization if they want their nonprofits to survive and thrive.

Management and general expenses are supporting expenses that cannot directly tie to your programs. These expenses can include insurance, human resource management, or rental space allocated for administration.

Fundraising expenses are those costs incurred raising contributions for the organization. This could include expenses related to fundraising events, direct mailers requesting donations, and wages of fundraising personnel.

It is important that nonprofits understand how to categorize functional expenses so that they are following IRS guidelines. However, there are no specific IRS requirements given on determining them. Nonprofits need to develop a functional allocation plan and document it. If your Executive Director is spending time thinking and planning how to grow a new service to meet a growing need in the community, that should be considered a program expense. However, if the Executive Director is meeting with a donor, that time is fundraising costs. And if time is spent planning a new hire orientation, then that would fall under Management and General Expenses.

Functional expenses are broken down in a matrix on the 990. They are also critical because of the audience reviewing them. Funders, donors, grantors, regulators, board members and the press all look to the 990 functional expenses as a way to understand how well the nonprofit is spending towards fulfilling their mission. So your organization should pay attention as well as to how your expenses are allocated in order to give the most accurate picture of your organization’s investment in your mission and your community.

Filed Under: Blog, Finance, Members

D&A’s Female Inspirations

March 3, 2021 by Casey Crowell

We have experienced a lot since last March. While we as a nation still have a lot of healing to do, we also have to remember where our strength comes from.

It’s Women’s History Month, and we at Danosky and Associates have taken some time to reflect on some of the inspirational female figures we each look to for strength. Putting together this list of incredible women has given us some time to appreciate how powerful female figures can have a positive impact on our mindset, so we encourage all of our readers to do the same!

[Read more…]

Filed Under: Blog

Gift Acceptance Policy Template

March 1, 2021 by Casey Crowell

Late one evening I received an e-mail from a former client, asking how to turn down a contribution they didn’t feel was aligned with their organization’s values.  A few days later an interesting article appeared in Philanthropy Today, from the Chronicle of Philanthropy.  Nonprofits risk their reputations when they accept gifts from questionable donors. It is one of the reasons for having a Gift Acceptance Policy and a Gift Acceptance Committee.  These issues are seldom black or white.  Basically, you want the ability to direct these questionable contributions to the Board, through a Committee and not have the responsibility (or blame) for accepting or not accepting a potentially controversial gift fall on the shoulders of your Executive Director of President.  I’ve linked the article above, and also included a template for a Gift Acceptance Policy which has seen many revisions over the years. 

Sample Gift Acceptance PolicyDownload

Filed Under: Blog, Members, Strategy

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