Finance – Nonprofit AF

Beyond the snowflake report: A case against financial and outcomes accounting tailored to individual donors and funders

Posted on September 19, 2023September 19, 2023 by Vu

[Image description: A closeup of a beautiful and intricate snowflake, clear in color, perching on some ice crystals. Image by Aaron Burden on Unsplash]

For decades, our sector has had this refrain: “Donors and funders deserve transparency. They have a right to know how nonprofits spend their donations and the outcomes they achieved.” Many of us agree with this, including me. Yes, nonprofits should be transparent. They need to report their revenues, expenses, program activities, and the results of their work. And most nonprofits do, as required by law. In the US nonprofits are legally required to file 990 tax forms each year. Most orgs release annual reports. Throughout the year they also let people know what they’ve been up to, using newsletters and other forms of communication.

The challenge is that for some reason the above level of transparency is not enough, and we’ve all convinced ourselves that not only do donors and funders deserve to know specifically how the dollars they contributed were spent and what outcomes could be personally attributed to them, but also that this somehow makes sense.

Foundations, please get over the urban myth of “tipping”

Posted on January 22, 2023January 22, 2023 by Vu

[Two donkeys, peeking their head over a fence. Image by mvdsande on pixabay.]

Hi everyone, before we get started, it’s been five years since Unicorns Unite: How Nonprofits and Foundations Can Build EPIC Partnerships, a book I wrote with co-authors Jessamyn Shams-Lau and Jane Leu, was released. Here’s a free webinar taking place on February 14^th at 10am PT to discuss what we’ve learned since then. Auto-captions will be enabled. Also, please use promo code UNI50 here to get 50% off your copy of the book.

Today, we talk about an issue that many of us probably had no idea existed, but one that is very annoying to those affected, and it perpetuates inequity. The concept of “tipping.” This is basically the idea that if a foundation gives a nonprofit “too much” funding, it would “tip” that nonprofit into becoming a foundation itself, which would then open a hole in the fabric of spacetime and an ancient evil would breach our dimension to rain chaos and destruction and there would be fire and brimstone and terrible wifi.

Inflation is killing nonprofits. Funders, you need to supplement your grants immediately.

Posted on April 24, 2022April 24, 2022 by Vu

[Image a green frog with an inflated vocal sac, standing on a leaf. Image by David Cole on Unsplash]

Hi everyone. We are rapidly approaching the summer, which means it’s time for the annual Party to Enhance Equity in Philanthropy (PEEP), a series of events across the sector where funders and nonprofit folks get together, virtually or in-person (ideally outdoors), to break down the weird power dynamics we have, and just learn to see one another as human beings. It should be fun and informal, and usually taking place on the week of Summer Solstice (June 21^st this year). If you are planning to host an event, please fill out this form by June 10^th so I can help spread the word.

While we are on the topic of the relationship between funders and nonprofit leaders, we need to talk about inflation, how it’s been affecting nonprofits, and what we need from funders. It’s really bad, the highest inflation rate in 40 years, and will likely stay bad or even get worse for a while. There are people more knowledgeable than I am who have written about this topic. This article (“Nonprofits and Foundations Need to Be Prepared for the Effects of Inflation on Services, Operations, and Endowments”), brings up several good points:

9 crappy paradoxes that shape nonprofit and philanthropy

Posted on August 2, 2020August 3, 2020 by Vu

[Image description: A golden retriever puppy, lying on the ground, their paws on the sides of their faces, looking sad and adorable. Image by birgl on pixabay.com]

Hi everyone, quick announcement: Please put August 10th at 12:00pm Pacific Time on your calendar for Community-Centric Fundraising’s first town hall meeting. Sign up here and we’ll send you the zoom link. Until then, the (CCF) Hub is designed to provide alternatives to our default white-centric fundraising narratives. It features about three new thought-provoking pieces of content each week, including “How prospect research can help nonprofits become less racist and more inclusive,” “What I Learned from Losing Two Jobs in the Fight for Racial Equity,” “‘You want a director of what now?!’ When orgs that are hiring are too lazy to know what they want,” and the first episode of the Ethical Rainmaker podcast, where CCF Co-Chair Michelle Muri and I talk about fundraising and equity. Check it out!

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I’ve been spending a lot of time flossing while thinking of how to categorize the challenges in our sector (What, like your quarantine activities are so much more interesting). Many of the stuff we deal with falls under the category of “well-meaning people inadvertently making nonprofits’ jobs harder.” Here are a nine. I’m going to call them paradoxes, though some of these are not paradoxes exactly, but are more like dilemmas, conundrums, or shenanigans. I’ve written about a few of them, but they keep coming up and remain a problem, so it’s good for us to review and have common language to push back. If we want our sector to succeed, we need to be aware of these paradoxes and control for them.

The urgency of making big funding bets on organizations led by marginalized communities

Posted on March 11, 2019March 11, 2019 by Vu

[Image descriptions: Four stacks of coins of ascending height in a straight line from left to right, with a large filled with coins at the end of the line. Each stack of coins as well as the jar has a green plant with multiple leaves growing out of it, the size of the plants also increasing with the height of the stack of coins or jar. They appear to be outdoors, with an out-of-focus outdoorsy background. Image by Pixabay. Description, as always, by Vu].

Last week, SSIR published a case study I co-authored with David Bley of the Bill and Melinda Gates Foundation detailing Gates’s significant investment in my organization, Rainier Valley Corps (RVC). Our partnership started with 1.1 million over four years to launch RVC’s fellowship program to bring more leaders of color into the nonprofit sector. These brilliant leaders would run programs, fundraise, set up systems, mobilize community members, and do whatever else the organization needs to be effective. About half the fellows are hired full-time at their host organizations during or after their fellowship, a critical outcome when only 18% of nonprofit professionals are people of color.

After running our successful fellowship program for a year, RVC learned several significant lessons, including the fact that the philosophy that grounds organizational development does not work for organizations led by communities of color. This philosophy, as I’ve pointed out before, is basically to force all organizations to be generalists, so that even small grassroots organizations must scramble to do HR, finance, payroll, evaluation, communications, legal compliance, contract monitoring, etc. And the ones that cannot do all these highly complex tasks simultaneously and with a degree of quality are punished.