Volume XXIV, No. 1-2
Change the Conversation About Overhead
     Overhead. Administrative costs. Indirect costs. Whatever term you use, the perception of these costs by the public and by donors is one of the greatest sources of frustration for nonprofit professionals. But there is hope on the horizon.
National Council of Nonprofits
     For years, the media and charity ratings have made overhead costs seem like something to be avoided rather than what they truly are: necessary investments that make service delivery possible and more efficient. As a result, these critical expenses are put off again and again. Planning for a new CRM to better target your services? Replacing that ten-year-old PC that's still running Windows XP? Sorry, that'll make our overhead ratio look too high. Maybe next year...
     Nonprofits have always been known for their ability to do more with less. Over time, it's become an expectation leading to a " nonprofit starvation cycle" where nonprofits are pressured, even given incentives, to continue to short-change necessary infrastructure investments. With resources scarce, and the demand for services so high that 52 percent of NC nonprofits cannot meet them, underfunding nonprofits can turn into not funding them at all.
     The only way to break the cycle is to broaden the conversation and make it about mission. Read more.
You are not alone
Is Your Nonprofit Stretched Thin?
Nonprofits like Urban Ministries of Wake County struggle to fill the shelves in their food pantries.
      The ALS Ice Bucket Challenge raised over
$100 million from 3 million donors last year, reminding us of the power of individual giving and the untapped potential of social media.
      New York City's largest human services organization reached the brink of bankruptcy after providing essential services for 80 years. More than 100,000 clients suddenly faced a disruption in services.
     You have seen stories like this in the national news. North Carolina is no exception. For seven straight years, nonprofits in our state have seen annual increases in the demand for their services. The Nonprofit Finance Fund's new 2015 State of the Sector Report quantifies the record rise in demands on nonprofits in our state. Read more.
If you ever want to advance
Learn How To Make a Sincere Apology at Work
      We are peppered with apologies from politicians, business people, and celebrities. Even TV journalism has one of its own stars apologizing profusely.
     Public apologies by famous people can be incomplete hedges designed to preserve the speaker's status while admitting enough to make the inquiry go away. It rarely works because people don't completely believe them.
An apology with the word "but" in it is not worth the oxygen to say it.
www.flickr.com/photos/25792994@N04
But we can gain valuable insights by how famous people mishandle these things.
     At work, sincere apologies play an important role. They clear the way for a productive relationship to grow again. Both managers and employees need to understand their power and place. Read more from Bruce Clarke.
5 Things Volunteers Need To Hear You Say
Bendetta Stevenson
volunteers at Crisis Control Ministry in Winston-Salem.
     Dedicated, trustworthy volunteers are incredible assets for nonprofits. Paying closer attention to how and what you communicate might be just the catalyst you need to grow your volunteer team. Be sure they hear these messages directly from you.
     1. We need you. You may think that people realize that their service is needed, but that's not necessarily the case. Tell your board, your funders, and the local media the stories about your great volunteers and what they do with you that makes a difference in your community.
     If you need more volunteers, you could mention that at the same time. Be specific about the areas where you need help. If they don't know there's a need, they aren't going to volunteer. It's that simple.
     2. You don't have to serve everywhere or every week - in fact, we won't let you. It's tempting to max out a volunteer who has proven reliable and trustworthy. Read more from Deborah Ike.
A Founder's Legacy: Leaving Well
Terry Allebaugh's departure as executive director was "an amazing year of transition." The board prepared a transition plan and did everything right.
     Terry Allebaugh had his "aha" moment when he was away from the office. He was at a workshop on executive transitions presented by the N.C. Center for Nonprofits with support from the Blue Cross and Blue Shield of North Carolina Foundation.
     He realized he'd fulfilled his work at Housing for New Hope (HNH), which he founded "to prevent and end homelessness one valuable person at a time." After 20 years as executive director, it was time to move aside and let new leadership take the helm.
     He wasn't ready to retire, but he was tired of the CEO's administrative responsibilities.
     The workshop was a safe, confidential environment for executive directors/CEOs to prepare both themselves and their nonprofits for their own eventual departure. The Center had also given Terry lots of templates and practical tools to make the transition easier. Read more.
What About Crowdfunding?
     Crowdfunding is any effort to raise money from a large number of people. At first, it was used mostly by young entrepreneurs to capitalize new for-profit ventures. Now projected to grow to a $90-96 billion industry by 2025, crowdfunding is touted as a valuable new tool for nonprofits' fundraising. No data tell us yet how much has been raised for nonprofit causes this way. 
     Crowdfunding happens either online or in person. Online crowdfunding is done via websites that showcase specific projects or causes. You've probably heard of "Kickstarter" or "Indiegogo." You (the sponsor) can post descriptions, videos, and pictures of your fundraising project or event, along with your dollar goal. This expands your reach far beyond your usual audience. Read more.
Ruth Peebles
     If you decide that crowdfunding fits your nonprofit , you'll want to check out all your options. This full Common Ground article gives you checklists of the top crowdfunding sites and questions to consider in choosing the one that fits your goals, mission, and budget.
     Thanks to Ruth Peebles, president of The INS Group (@TheINSGrp, Innovative Nonprofit Solutions), for providing these resources to help you make good decisions.
     Ruth served as an intern at the N.C. Center for Nonprofits while working on her MPA degree in the mid-1990s. Read more.
Apply by October 1
Listen to a Webinar on N.C. GlaxoSmithKline
Foundation's Ribbon of Hope Grants
     Many nonprofits are providing outstanding services, but struggle with limited resources to meet the needs of your communities. The North Carolina GlaxoSmithKline Foundation invites you to apply for the Ribbon of Hope Grant Program, a one-time opportunity for $25,000 to expand and/or enhance an existing program or to provide seed funds for a new initiative that furthers science, health, or education in your community.
     The Foundation and McREL International will host one-hour Q&A Webinars about the program, eligibility, application process, and reporting requirements in anticipation of the October 1, 2015 proposal deadline on: August 11 at 10 am; August 26 at 3 pm; and September 2 at 12 pm.
     Learn more about the Ribbon of Hope Grant Program and view the complete Request for Proposals. Learn more about the North Carolina GlaxoSmithKline Foundation.
Use Storify To Pull It All Together
Ruby Sinreich shares her
enthusiasm at the NCTech4Good conference (@rubypix).
     How you interact with your audience has changed forever. The days of the monologue have passed. People expect to be engaged in real-world collaboration and conversation through the social web.   
     It's in these conversations that you discover trends and gain an honest understanding of your audience's experience with you or your organization. This might be what they like about an event, how a speaker made them feel, or what they think about your services.
     This "user-generated content" can tell a broader story that helps you serve your community better and meet your mission. The question is: What do you do with it? How can you interpret it? Whether you capture or listen to it or not, people will create it. Tons of it! That's where tools like Storify come in.
     What is Storify? S torify is a free online tool that lets you tell stories by curating content from your social networks and the web. It captures the voice of the community by compiling people's reactions to a shared experience, such as a speaker at an event, news story, disaster, or trend. Read more.
Who's the Boss? The Board or the Executive?
     You find an abundance of advice for nonprofit boards and executive directors about the advantages of "partnership" and "open communication." But sometimes that advice just isn't enough.
     Who's the boss? The board or executive director/CEO?
     The answer. It depends on whether the board is acting as a body, or whether board members are acting as individuals. The key is remembering that the board is different from board members.
 
     When the board acts as a body. It's not the board chair who hires the executive director; only the board as a whole can do that. The treasurer doesn't approve the budget; the board as a whole does that. In other words, when the board is acting as a body, it is the boss. The executive is answerable to that body.
     When the staff is the boss. On the other hand, when board members act as individuals, they typically work at the direction of staff.
     At a special event, for example, board members might show up and ask staff, "Where do you want me...the registration table? The silent auction?" Or, the fundraising manager gives a list of five people to each board member for fundraising calls...and then checks a week later to see if they've been called.
     Imagine a board chair walking into the executive's office. "You need a better desk and chair," she says. "The ones you have are terrible!" The executive smiles and says, "Thank you for your advice, but this desk and chair are fine with me." Read more from Jan Masaoka.
The Why, Who, What, and How of an Audit Committee
     An audit committee is considered a best practice for nonprofits. It helps the governing board perform its fiduciary and financial oversight roles, reduce risk, and maintain donor confidence.
     Q: Why should your nonprofit have an audit committee?
     A: First, it is required by the federal Sarbanes-Oxley Act of 2002. While the Internal Revenue Code does not require an audit committee, your IRS Form 990 asks if you have one. Since this is a public document, answering "no" may lead funders to question why your organization is not following a suggested best practice.
     The American Institute of Certified Public Accountants lists in Audit Committee Toolkit: Not-for-Profit Organizations, 2nd Edition many reasons to consider forming an audit committee. These include: (1) better financial results; (2) better decision-making due to improved accuracy and quality of financial reporting; (3) stronger relationships with stakeholders; and (4) facilitation of transitions in leadership.
     Q: Who makes the best audit committee members?
     A: Audit committees typically have 3-6 members with diverse backgrounds and experience, all of whom are "financially literate." This means they should be able to read and understand fundamental nonprofit financial statements and recognize if the numbers and associated disclosures do not make good business sense. At least one member needs to be a financial expert. Read more from Langdon & Company.
Pay Me Now or Pay Me Later - or Both
     As investment advisors to both wealthy individuals and nonprofits, we witness charitable giving from many angles. Individuals seek advice on the most tax-effective way to make donations. Both they and the nonprofits they support often wonder whether a particular gift should be earmarked for an immediate cash
Andrew Burns, Richard Woods, and Nathan Byrd of Hamilton Point Investment Advisors, LLC
need or for longer-term goals.
     Many discerning individuals have learned that, like investing in business ventures, they can envision a positive "societal return" on gifts when directed to the right organizations. Before donating, they want to know exactly how their money will be spent and to be shown how the nonprofit is accomplishing goals that ultimately improve the lives of individuals or the environment and wider community. Read more from Hamilton Point.
Americans Donated $358 Billion Last Year
Highest total in 60 years of Giving USA's reports
     Americans gave an estimated $358 billion to nonprofits in 2014, surpassing the peak last seen before the Great Recession. The 2015 Giving USA says that this total slightly exceeds the benchmark year of 2007, when giving hit an estimated inflation-adjusted total of $355 billion.
     This was a 7.1 percent jump last year in current dollars or 5.4 percent if adjusted for inflation.
     A word of caution. While total inflation-adjusted giving has grown beyond its prior peak, a bit of caution is warranted. Patrick Rooney is associate dean for academic affairs and research at the Indiana University Lilly Family School of Philanthropy, which researches and writes the report. He noted, "As three of the four sources of giving have not yet exceeded their previous peak levels, with only foundation giving reaching its prior high, it is still too early to tell if total giving will sustain above the pre-recession level." Read more.
Can Self-Compassion Overcome Procrastination?

     Why do we procrastinate? Often because we fear failing at the task and dread all the negative self-evaluations that might result. Feeling okay about ourselves becomes more important than achieving the goal.
     But the procrastination, of course, triggers other negative feelings about ourselves - recriminations and ruminations for "failing" to take action.
     In 20 years of providing psychotherapy, I've witnessed so many times how paralysis in the face of a task or problem can lead to escalating levels of self-criticism and self-depreciation, a self-perpetuating downward spiral.
     Most procrastination-fighting techniques focus on changing your behavior: just get started, take action, any kind of action. But a recent study suggests a different approach: being kind to yourself. Read more about Linda Graham's research.
9 Truths About Black Holes and Dark Risks
Art by Mark A. Garlick, NGM 
     National Geographic Magazine featured a fascinating article about black holes, a space where things go, but never escape.
 
   Some of the "truths" about black holes are eerily familiar. They remind me of what I call "dark risks" - the controversial risks that cause many leaders in nonprofits to look away. These are the risks that make everyone uncomfortable. "Dark risks" share these characteristics with black holes:
     1. What's inside often stays there. When nonprofit leaders bury "dark risks," it's hard to get them out. This is especially true when leaders intentionally bury their knowledge of the risk. Read more from Melanie Herman.
Legal & Legislative
David Heinen, Vice President for Public Policy and Advocacy, N.C. Center for Nonprofits
     We track the policy issues that affect your operations. Follow the links below to the N.C. Center's website for the latest about what may change for you.
     Our website and Public Policy Updates also tell you when is the best time to share with your government officials how a proposed change would affect your ability to achieve your nonprofit's important mission.
     The most pressing issues today that affect 501(c)(3) nonprofits in NC are:
Sweeping Changes Proposed for Overtime Pay
     Sweeping new regulations for overtime have been proposed by the U.S. Department of Labor. They are designed to expand overtime protections for millions of workers employed by nonprofits, for-profits, and governments. They would not go into effect until after a period of public comment and analysis.
     The draft changes would raise from $23,660 to $50,400 the minimum salary for which employers must provide overtime pay to white-collar employees. Currently, full-time workers at salaries below $23,660 must be paid 1.5 times their hourly salary rate for any hours over 40 that they work in any week. This is often called "time and a half." In the draft regulations, only employees making $50,400 or more could potentially be "exempt" from overtime pay.
     The only way to help be sure that the final regulations fit your nonprofit is to provide your questions or comments about the proposed regulations by September 4, 2015. Please send them to David Heinen at the N.C. Center for Nonprofits, too. Read more.
The Truthiness About Overhead
From Grantmakers for Effective Organizations and 
GMNsight (Grants Managers Network)
     Overhead or administrative spending has become a way that many funders measure how well a grantee is doing. But a growing number of funders and nonprofits are finding that it does not paint an accurate picture of a nonprofit's financial health, sustainability, or overall effectiveness.
     Recent initiatives like the Overhead Myth and Real Talk About Real Costs point to effectiveness as a composite of financial health, leadership strength, organizational capacity, and program outcomes. Read more from Heather Peeler.
Good Stuff Free (Or Almost)
Save When Your Clients Swipe
     Dharma Merchant Services in San Francisco offers card payment solutions with Interchange Plus pricing and fully transparent practices. Center Members save with no annual fee, no monthly minimum, no setup fee, and no PCI compliance fee. Learn more and contact Heidi Asztalos (866.615.5157 x.103) to get started.

How Usable Is Your Website?
     Step into your audience's shoes and test your website's usability. If you are stumped by a step in the process, your users will be, too. Get questions to ask, how to run your test, and evaluate your results.

Too Cool for School
     Who needs a whiteboard when you have Pixiclip? Get creative with this online interactive canvas. Upload images, draw sketches, record a video message, and more.
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The N.C. Center for Nonprofits' mission is to enrich North Carolina's communities and economy through a strong nonprofit sector and nonprofit voice. We serve as a statewide network for nonprofit board and staff members, an information center on effective practices, and an advocate for the nonprofit sector as a whole.
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