the donors forum blog

state budget preview: further cuts to safety net on the horizon

2012-02-09T09:50:30-06:00

Illinois' economic vitality and the strength of our communities depend on a well-managed and well-maintained network of nonprofit services. While the details of Governor Quinn's fiscal year 2013 budget won't be released until his budget address on February 22, an analysis from Voices for Illinois Children's Fiscal Policy Center estimates that cuts to human services represents 60 percent of the Governor’s total cuts of $574 million. These cuts are being justified as a necessary response to weak projected revenue growth and skyrocketing pension liabilities.These cuts will likely add an extraordinary burden to the already hollowed out social safety net.

The analysis projects that human services (including funding for the Department of Human Services, Department of Children and Family Services, Department on Aging, and several smaller agencies) will bear the brunt of the state’s total budget cuts. The $350 million reduction translates into programmatic cuts of about 10 percent (excluding programs funded by Medicaid dollars); these eliminations are on top of FY12’s 12.8 percent reduction in programs and operations. To see this from a long-term perspective, from FY09 to FY12 addiction treatment was reduced by 69%; youth services by 41%; and mental health grants by 36%.

While cuts may be inevitable in order for Illinois to get back on track, Donors Forum will be in Springfield on February 22 for the Governor’s budget address and will continue to advocate for a budget that reflects the will of the people of Illinois and best serves our sector and our communities.

~Hannah White, Public Policy Coordinator

image source via wikimedia commons

"community of practice" to focus on solving the nonprofit overhead challenge

2012-01-25T19:37:36-06:00

Donors Forum’s second "Community of Practice" focused on Solving the Nonprofit Overhead Challenge launched on January 25, 2012 with leaders from 26 grantmaking and nonprofit organizations participating. The group discovered that in total they had worked in the sector for over 576 years! Combined they bring a significant amount of on-the-ground experience working in nonprofit and funder organizations, and dealing with the challenges around the issue of nonprofit overhead – which will serve to inform this important conversation this year.

Helping to frame the launch of the Community of Practice were two national experts on the topic:

Ann Goggins Gregory (left) from Bridgespan and Kathleen Enright (right) from Grantmakers for Effective Organizations. Ann and Kathleen shared the research on overhead in the sector and talked about “the nonprofit starvation cycle” that nonprofits often find themselves in as they respond to funders’ demands and pressures to conform. The group also discussed the “burning platform” that exists and motivates them to make change here in Illinois on this important issue.

We're excited to welcome the Overhead Community of Practice group and to see the dialogue and change that develops from their community this year.

Find more on the other Community of Practice Donors Forum is sponsoring – its title is Streamlining Grantmaking – here.

~Robin Berkson, Senior Vice President, Member Relations

and Laura Zumdahl, Vice President, Nonprofit Services

The Brinson Foundation and the Eleanor Petersen Fund for Donor-Donee Relationships provided partial funding for the Communities of Practice.

Image 1: Solving the Nonprofit Overhead Challenge inaugural meeting, January 25, 2012

Image 2: Ann Goggins Gregory (left) and Kathleen Enright (right) presented at the meeting.

free webinars will help nonprofits engage voters + keep it legal this election year

2012-01-23T17:26:08-06:00

2012 is going to be a big year for our communities. Our general primary is in March, a presidential election still awaits in November, and state and congressional elections are also in play. Is your nonprofit ready to rally your community to participate? Donors Forum's Public Policy team invites you to participate in two webinars this week that focus on the upcoming election year. Both webinars are free and open to all.

First, on Thursday, January 26, from 1- 2pm, Nonprofit Vote will discuss Building a Voter Engagement Timeline for 2012. We will discuss everything from your nonprofit's plan for registering, educating, and engaging voters to when, where, and how to incorporate voter engagement activities into your work. We'll help you develop and tailor a 2012 voter engagement timeline for your organization.

The second webinar, on Friday, January 27, from 10-11am, Delia Coleman, Donors Forum's Director of Public Policy, will discuss What Nonprofits Can and Can't Do In an Election Year. Participants will learn the legal limits for election year activities: What’s the appropriate way for a nonprofit to register voters? What are the rules for a candidate forum? What's the difference between a ballot initiative and electioneering? Why can't your organization support a candidate for office?

Don't miss these important opportunities to start building your plan for voter engagement now!

Image: Election 2012 Button, via creative commons.

author series: jeanne gang on the chicago river -- join us on feb 6

2012-01-20T12:45:59-06:00

MacArthur Fellow, architect, and urban planner Jeanne Gang designs with a fondness for wildlife. Her work includes such nature-inspired buildings as the tortoise-inspired boardwalk at Lincoln Park Zoo, and Starlight Theater in Rockford, IL, the roof of which opens like a flower.

She is perhaps best known for her 82-story Aqua building in the city's "New East Side"-- her next big idea reflected in its oscillating windows: the Chicago River

In her new book, "Reverse Effect," Gang effectively proposes undoing the 19th century engineering feat that changed the flow of the Chicago river from east to west. Gang's idea began as a solution for the Asian carp problem, but soon opened up new possibilities for improving the quality of life in the city.

As part of her plan, Gang proposes building a barrier that would separate watersheds back to their natural state, creating an opportunity to reclaim the surrounding, long-abandoned industrial land for redevelopment, as well as provide potential for recreational water access. Gang's innovative plan involves manipulating the landscape in a way that would put nature right in the middle of the city amidst inescapable urban sprawl.

While the idea of reversing the Chicago River is not new: Gang's broad, holistic approach makes it stand out as a realistic plan to unlock the potential of the area's waterways. The plan includes solutions for everything from more efficient water treatment and introducing green infrastructure to keeping our basements drier.

Donors Forum is pleased to host Jeanne Gang for the second event in its Author Series, a new opportunity for connecting grantmakers, nonprofits, and advisors with each other and national experts. Event details are as follows.

When: Feb. 6
Time: 5:00 pm - 6:30 pm
Where: Access Living, 115 W. Chicago Ave, Chicago
Fees: $30 for Forum Partners, Members, and Associate Members; $45 standard fee
Registration: Register here

~Kathleen Murphy, on behalf of Donors Forum

illinois grantmakers + nonprofits come together for a unique "community of practice" on streamlining grantmaking at donors forum

2012-01-19T12:51:39-06:00

Donors Forum’s new "Community of Practice" on Streamlining the Grant Process kicked off January 18 with an enthusiastic group of 30 leaders from Member and Forum Partner organizations, and Associate Members from the Chicagoland area. Participants began a journey focused on finding mutual understanding and fostering working together as grantors and grantees to find solutions to streamlining the grant process in the sector.

The Community will meet multiple times throughout 2012 to learn from one another. The session on January 18 was spent getting to know the Community members and hearing from national streamlining expert Jessica Bearman about the work that has already been done by Project Streamline and others in the sector up until this point. Jessica spoke about the importance of streamlining for both grantors and grantees and where opportunities exist for change. She encouraged participants to spend 2012 “putting on their streamlining hats” as they tackle this challenging problem.

A huge welcome to the Streamlining Community of Practice members! We’re excited to see the conversations and change your Community develops this year.

~Robin Berkson, Senior Vice President, Member Relations

and Laura Zumdahl, Vice President, Nonprofit Services

The Brinson Foundation and the Eleanor Peterson Fund for Donor-Donee Relationships provided partial funding for the Communities of Practice.

Image: Donors Forum's Streamlining the Grant Process "Community of Practice" first meeting, January 18, 2012

donors forum calls new water fees a hidden tax

2012-01-12T16:26:53-06:00

As new water fees in Mayor Emanuel’s 2012 budget take effect this month, Donors Forum is concerned for the hundreds of Chicago nonprofits who will be hit with a new bill they can ill afford – one that might also represent a hidden tax on the nonprofit community.

“Nonprofits should pay their bills every day, like other organizations. That’s not the source of our concern,” says Valerie Lies, President and CEO of Donors Forum. “However, fees that are used to provide revenue for operations outside of water infrastructure are a tax and the City is asking tax-exempt churches, schools, hospitals, and community organizations to pay it.”

The City’s 2012 budget overview proposes a 70% increase in water usage fees over the next 4 years for homeowners, as well as a removal of the water subsidy for nonprofits, in order to upgrade the City’s aging water infrastructure. Water fees are projected to contribute most of the revenue for the City’s Water Fund which supports the City’s operation, maintenance, and capital costs of the water and sewer system.

A closer look at the budget, however, shows at least 20% or $220 million would cover other City expenses. An analysis by Illinois PIRG (Illinois Public Interest Research Group) has found the revenues generated by new water fees will fund other government operations:

$260 million: Fund annual operations in the water department
$250 million: Water infrastructure
$93 million: Set aside funds to cover unanticipated capital cost overruns
$220 million: Other city expenses, including:
- $150 million: Employee health and pension benefits and other unspecified “municipal services”
- $41 million: Department of Fleet Management and Facilities Management
- $2 million: Inspector General’s office
- $8 million: Department of Finance to pay for “professional and technical services,”

postage, and the rental and maintenance of computer equipment

$5 million: Department of Innovation and Technology for “contractual services”

“Mayor Emanuel’s budget avoids many of the budget gimmicks that had become common-place, like last minute asset lease deals and raiding the rainy day fund,” said Brian Imus, State Director for Illinois PIRG. “Unfortunately, the proposed water hike is an all-too-familiar accounting trick that hides the true cost of the budget to Chicago taxpayers.”

The water fee is also a red flag for nonprofits worried about threats to their tax exempt status. The Inspector General’s 2010 report recommended removing nonprofit exemptions for water usage and sewage fees, estimating that removing the nonprofit fee waiver could provide up to $15.2 million in revenue for the City. The Emanuel administration has taken that recommendation to heart and is in the process of revoking all other fee waivers.

Laurel O’Sullivan, Vice President of Public Policy at Donors Forum, also argued for nonprofit parity. “If the City is going to make water fee discounts available to organizations who can demonstrate they provide a disproportionate size of charity care, community-based nonprofits should be eligible for the 20% discount on their water bills, as well.”

“Most Chicago nonprofits deliver basic needs to every neighborhood in the city. This is how community based nonprofits earn their tax-exemption – by providing goods and services on behalf of the public good without a profit motive. To tax these organizations is unfair and bad practice,” she said.

~Delia Coleman, Director, Public Policy

Image: The Chicago River, via creative commons.

guest post: jan masaoka on the nonprofit's guide to human resources

2012-01-12T12:29:49-06:00

I once served on the board of a group whose executive director adamantly insisted that managing staff was her responsibility, not the board's. We stayed hands off until we started to hear rumors of favoritism. After we prevailed in a battle with her about getting a listing of staff pay, we were shocked to discover that her assistant was paid $20,000 more than the program director and nearly as much as the development director. A lesson - actually several lessons - learned.

The role of the board of directors in personnel or human resource administration is frequently a sticky issue for nonprofits. Should the board approve all salaries, or just the executive director's? If a staff member has a grievance, should it come to the board? How can the board's finance committee members, for example, be helpful in hiring accounting staff, but not usurp the hiring role of the executive staff? How can a board member appropriately give feedback to the executive director on the behavior of a staff person?

Boards tend to be at one extreme or another: some insist on approving every raise for every staff member, while others never see a salary report. This article proposes specific guidelines for board oversight that don't take away from the chief executive's authority or responsibility. The board can approve various policies such as salary ranges while not interfering with the staff's ability to manage. However the board structures its oversight, it needs a formal process to exercise that oversight. These guides provide such a process, and follow the principle that the board as a whole governs the organization, while individual board members can be helpful advisors to staff.

Guidelines for the Board's Role in Human Resource Administration

1. Committee(s): The board establishes a board-staff committee that works with matters related to paid staff. Only board members have votes on the committee. This committee makes recommendations to the board for approval (rather than deciding matters on its own). Following are the areas for this committee's scope of examination.

2. Personnel policies and employee manual: The executive director is responsible for ensuring that personnel policies and procedures are disseminated and implemented, and that the policies are reviewed as appropriate by the board. Individual members of the human resources committee may be able to bring their human resources expertise to make suggestions. Every two years or so, the human resources committee (or a task force) reviews the policies with staff and, if appropriate, drafts changes or a complete revision.

3. Salary scales: The executive staff draft a rate schedule (salary ranges for each position or category) of salaries, which is reviewed by the human resources committee or task force. This ensures that the board has considered the strategic matters related to salaries: whether the schedule is in line with the organization's values, whether there is appropriate internal equity or differences among positions and departments, whether specific positions are appropriately placed on the scale, whether compensation is in line with that at similar organizations, and/or whether the compensation supports (rather than hinders) the organization's ability to recruit qualified staff.

The salary schedule is sent by the committee or task force to the whole board for approval. In this way, the executive staff are still responsible for salaries, but the range of salaries is one approved by the board.

4. Salary scale compliance: Once a year, the human resources committee or task force reviews the specific salaries of the staff (by name and position) against the salary schedule, to ensure that no individuals are being paid outside the range for that person's position. The committee's job is to protect against favoritism and ensure compliance with the salary schedule, NOT to review whether any specific individual deserves a particular salary.

5. Benefits: The benefits schedule - health insurance, long-term disability insurance, 401(k), and so forth - is reviewed annually as part of the budget process, with costs projected for the coming year. The human resources committee should review the benefits package at least every two years and suggest changes (additions or subtractions), and their financial implications, to the executive director, the board's finance committee, or both.

6. Hiring: In some cases, at the request of the executive director, one or two board members may help with hiring. A common example is the board treasurer helping to interview and select the chief financial officer (CFO) or accountant. It should be made clear to everyone involved that the final decision is made by the staff person to whom the new hire would report. In these situations individual board members are acting as advisors to staff.

7. Diversity: If an organization has established goals or principles regarding a staff that is diverse in race, ethnicity, gender, age, disability, or other characteristics such as client status, there will be an HR role to play in implementing the policies and goals. A board-staff diversity committee, or the board or board-staff HR committee, can assist with making sure that recruitment efforts reach out effectively (for example, through the ethnic press), be on the alert for indicators of weak management of a diverse workforce (such as a string of resignations from Latina nurses), and with monitoring progress towards goals.

8. Layoffs: A management decision to lay off staff usually reflects a financial situation that should already have been shared with the board. In this context, the steps that management is taking to deal with that financial situation -- whether layoffs, paycuts, new income strategies, or others -- should be discussed with the board and the board should bless or put a hold on management actions. Although in most staffed organizations the decision of who to lay off and when and how are management decisions, it's critical for the board and management to be in sync about how the organization is responding to financial problems.

9. Grievances: Grievances on the part of employees must first go through the written procedures outlined in the employee policies manual. If an individual has exhausted the grievance process and that process has been documented, individual employees may be permitted (if it is so written in the policies) to raise a grievance to either the board chair or the board's human resources committee, which then acts as the final arbiter. This may be especially appropriate where the complaining employee reports to the executive director and has an unresolved complaint about the executive director.

10. Serious charges about the organization's management: Sometimes a staff member has a serious charge against management, such as the illegal or improper use of funds, sexual harassment, discriminatory behavior, or improper accounting methods that cannot be taken up in the grievance process. To provide an outlet for such matters (other than a complaint to the state attorney general), some organizations allow staff members to raise such concerns with the board chair. When other board members hear such complaints, they have a responsibility to direct the staff person to the board chair. By making the board chair the sole recipient of such charges, the board can prevent a disgruntled staff member from trying to develop allies on the board against the executive staff, and can provide a way to bring an organizational matter to the attention of the board as a whole.

Delegating Personnel Work

The board can choose how to delegate personnel-related work. The most common choices are:

a standing (permanent) human resources committee,
a human resources task force (that is, a temporary committee),
a board-staff standing committee, or a
board-staff task force.

Committee members might include the staff human resources director (if there is one) or executive director, and/or non-board volunteers such as a human resources attorney. (Note that if non-board individuals are members of the committee, either they should be as non-voting advisory members of the committee, or the committee's recommendations should come back to the board for approval.) In some cases, the human resources committee is also responsible for developing plans and strategies for appropriate recruitment and utilization of volunteers, while in other organizations the human resources committee looks only at paid personnel.

Each organization will want to choose its own guidelines on these sensitive and important issues. Striking the right balance between board and ED authority may initially be challenging, but it's far from impossible. In the end, sorting this out will strengthen your organization while making life easier for board members and staff.

Jan Masaoka is the author of The Nonprofit’s Guide to Human Resources. This article is a condensed version from chapter 8, The Board’s Role in HR. The book is available for sale at www.nolo.com or www.amazon.com. This article originally appeared in Blue Avocado (www.blueavocado.org). Jan is the founder and editor-in-chief of Blue Avocado, an influential online nonprofit magazine with a remarkable 63,000 subscribers. In January 2012, Jan became executive director of the California Association of Nonprofits.

john bouman on justice, and engaging in a useful life

2011-11-18T12:13:20-06:00

At a recent planning meeting for an exciting new symposium that Donors Forum is planning on civic engagement (save the afternoon of Feb. 28; find details here), Sharon Bush of the Fry Foundation shared a quote from John Bouman of the Shriver Center on Poverty Law and Co-Chair of Donors Forum's Public Policy Committee.

The quote is from a speech John made in accepting William Sloane Coffin Award for Justice and Peace on November 6, 2011 from the Protestants for the Common Good. It inspired our planning group, and I wanted to share it.

“It is important and valuable to win positive changes that improve lives and equalize opportunities … but that will always be counterbalanced by the work still to do. The real goal and the lasting satisfaction come from the effort itself. To engage in a useful life, to strive for excellence, to revel in good colleagues, to serve those who need help, to re-balance the power equations in society, to increase the measure of justice just by being in the game…” ~John Bouman, November 6, 2011

~ Celeste Wroblewski, Vice President, External Relations

Photocredit: http://thecommongood.org/

less than two percent of individuals’ income in illinois goes to nonprofits: key findings about individual giving in illinois

2011-10-27T19:56:27-05:00

Nationwide individuals’ charitable giving is by far the largest source of private contributions to nonprofits: in 2010 individuals’ giving accounted for 81% of all private donations, totaling $211 billion. 8% of these donations are from bequests with the remaining 73% from individuals, according to the Giving USA 2011 report that incorporates data from the IRS, issued in June.

Individual giving decreases by almost $650 million

In Illinois individuals gave almost $6.5 billion in 2009, the fifth highest of all the states in the country in real dollars. Despite the magnitude of that sum, individual giving has continued to decline slightly in recent years. According to the IRS, in 2009 individual giving decreased by $649 million from the previous year and is down over $1 billion since 2007.

Percentage of Illinois Households Giving

Despite the almost $6.5 billion donated in 2009, only 27.7% of Illinois households made a charitable contribution, ranking Illinois nineteenth in the country in percentage of households making contributions.

The percentage of Illinois households giving fell by 0.8% in 2009 from the previous year and is down 3.4% from 2006.

Average giving of Illinois households

On average, Illinois households donated 1.85% of their adjusted gross income to charity. The national average is 2.02%, ranking Illinois 33rd in the country. The percentage of income donated by Illinois households has also decreased consistently from 2.1% in 2006.

The average contribution per Illinois household was $3,904 (31st in U.S.), with the average contribution ranging from $1,181 for households making less than $50,000 to $14,790 for households making over $250,000.

~ Laura Zumdahl, Vice President, Nonprofit Services

as late payments pile up, policy - not politics - should govern

2011-10-25T10:18:03-05:00

The General Assembly returns to Springfield this week for the fall legislative session. Governor Quinn laid out his top three priorities for this session: 1) sustaining his veto of a 'smart grid' energy system, 2) ending legislative scholarships, and 3) passing a revised gambling bill. Noticeably absent is paying down the backlog of overdue bills.

Illinois needs to make paying its bills a top priority. New analysis from the Illinois Partners for Human Services shows how human service providers continue to wait for more than $458 million owed to them by the state, forcing many to cut back on services and some to shut their doors altogether. And too often, the decision of what organization gets paid first is a matter of politics. Documents obtained by the Associated Press under the Freedom of Information Act detail how nonprofits backed by lawmakers are bumped to the top of the list. The system lacks transparency and should be replaced by a policy of “first in first out.”

As overdue bills pile up, nonprofits across Illinois are struggling to make payroll, pay rent, and accommodate increasing demands for service. For too long, nonprofits have had to rely on last minute pleas to lawmakers to expedite overdue payments. Illinois should institute and abide by a “first in, first out” policy of paying bills based on when they come in – not who is asking for a favor. The state should publish a list of delayed payments to service providers by agency, how much each is owed, and how long the bills are overdue. This would put an end to the clout-ridden process that pits nonprofits against one another in pursuit of dollars they are legally owed.

Illinois depends on the partnership of nonprofit organizations to provide the services government can’t. By providing vital services, nonprofits ease the burden of government and help fulfull the social compact; but they cannot be expected to until the state comes up with a plan to eliminate the backlog of long-overdue bills and introduces a rational and fair payment process.