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Thoughts On Nonprofit Leadership (Part I)

The word “leader” conjures up a variety of images:  your old Little League coach, a military general, your boss…even the president of the United States.  Regardless of who (or what) comes to mind, there is the common thread of someone who leads.  But what does leadership really mean?  Certainly it means more than just being in charge.  And in the setting of a nonprofit organization, is the meaning different?

I would submit that while the meaning is not so different, the goal of leadership often is.  For example, in a for-profit setting, the goal is the financial success of the company.  Sure, there are other intermediate goals and purposes.  But when you get down to brass tacks, it’s about the money.  The leaders expend their energy leading employees and influencing prospective customers in an effort to make a profit.  In politics, the goal may be the establishment of a political agenda.  Leaders attempt to influence voters to support their particular brand of government.  Just look at most election cycles.  Not that pandering is the same as actual leadership, but I digress…

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Nonprofit Unrelated Business Income

There are few topics that generate more confusion to nonprofit managers than unrelated business income (UBI).  It is also one the areas than can cause the most problems for your organization.  It can cost you money…even your tax exempt status if not properly handled.  In this issue of our newsletter, we will shed some needed light on the subject.

The technical definition of UBI is: Income from a trade or business that is regularly carried on by an exempt organization and that is not substantially related to the performance by the organization of its exempt purpose or function, except that the organization uses the profits derived from this activity. Clear?  Not really.  A better way to say it is:  money generated from any on-going activity of your organization when the activity itself does not directly further the organization’s exempt purpose.  Examples are helpful:

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IRS News for Nonprofits

It’s the beginning of another new year.  And along with everything else that comes with a flip of the calendar, the IRS has several things up its sleeve for nonprofits in 2011.  Let’s take a look two of the most crucial.

Audits of nonprofits to increase. As if the IRS didn’t have enough to do already, 2011 brings the news that the IRS plans to continue its expansion of audits of 501(c)(3) and other tax-exempt nonprofits.  2010 saw a 12% increase in the number of audits initiated and that trend is expected to continue throughout 2011.  More than 100 new auditors have been hired by the IRS since the end of 2008 in order to provide the manpower necessary.  The primary source material used to trigger audits remains the Form 990 filed by organizations each year (see below), though collaboration with other agencies, such as the Social Security Administration, is increasingly providing leads worthy of the IRS taking a closer look.

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You Get What You Pay For

One of our staff members was rummaging around in the back of a closet here in the office the other day looking for some Christmas decorations.  She came across a framed quote that someone stuffed into a box years ago.  I don’t remember ever having seen it before, so I don’t really know where it came from nor to whom the quote should be attributed.  But, given that our sales consultants get into the price vs. value discussion with prospective clients fairly often, the message is one of simple truth.  It says:

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Of Nonprofits and Copyrights Part II

In our last post, we examined the hypothetical example of Jane Doe, Executive Director of Money University, a 501(c)(3) organization that teaches lower income people the principles of money management.  To recap, Jane is a founder, board member and primary instructor.  Jane is also an author who has written a number of books that Money U. would like to sell (see Part I for a full discussion).

Part II of our discussion will focus on a different scenario.  As part of Money U.’s future program plans, the board has expressed a desire for Jane to create curriculum to be used in its classes.  What are some of the possibilities?

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Of Nonprofits and Copyrights Part I

The Foundation Group works with up to 1,000 nonprofit startups each year, so we get the opportunity to deal with many complex issues.  Few are as complicated and confusing as copyright and royalty questions.  My goal with this post is to give you some ideas of how best to deal with your intellectual property concerns.

It is probably best to begin with a fictitious (but typical) example:  Jane Doe is Executive Director of Money University, a 501(c)(3) organization that teaches lower income people the principles of money management.  Jane is not only Executive Director, she is a founder, board member, and the primary instructor.  Jane is also an author who has written two books about personal finance.  The board believes her books, which were authored prior to the formation of the nonprofit, are a good fit to be sold by the organization to support its teaching program.  There are also plans to have Jane create curriculum.

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Questions Other Nonprofits Are Asking

If you are operating a nonprofit organization, chances are good that you have questions…lots of questions.  And, it probably wouldn’t surprise you to know that your contemporaries in other nonprofits have lots of questions, too.

Here at The Foundation Group, we get questions everyday.  Many come from current or prospective clients who call or write.  Others are posted as comments to our blog articles.  As I was going through some of the most recent comments and questions on the blog this morning, it occurred to me that if someone is asking, others may be wondering about something similar.  So, in today’s post, I’m going to show you some of the questions being asked by readers and the answers we provided.  This is just a random sample of what has come in over the last couple of weeks, but the topics range widely.  The ones below were chosen because they represent themes we see repeated quite often.

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The Efficiency Trap

Ok, it’s confession time.  As a lot of preachers do with their sermons, this article rises of out some self-evaluation I’ve been engaging in since I picked up Timothy Ferriss’s book, The 4-Hour Workweek.  While my goals are certainly different from Tim’s (I’m not shooting for a 4-hour week…not yet anyway!), the theme running through his book really brought back into focus for me the battle of efficiency vs. effectiveness.  I could instantly see how so many small business owners and nonprofit leaders are daily losing this battle without even realizing they are engaged in it…including me!  Understanding the difference truly separates the winners from the losers.

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Is Your Nonprofit Repelling Donors?

Every nonprofit in existence needs money.  Your ability to pay the bills depends upon it, not to speak of your ability to accomplish your mission.  But do you really understand what it takes to be attractive to donors?  Is your organization truly fundable?  Or, have you inadvertently created an atmosphere that repels givers?

In this week’s article, we are going to explore key elements of fundability by looking at three areas of concern:  mission, structure and behavior.

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