October 2010


(New York Times)  One way that nonprofits handle a difficult economy is by embarking on a “hybrid model” for funding, in which a for-profit company works with a nonprofit to propel further funding and, ideally, more effective philanthropy. Allen Bromberger, a lawyer specializing in nonprofit financing, said of the hybrid model:  “It is virtually impossible to grow a social enterprise in any significant way relying wholly on donated money, earned revenue and debt financing, which are the only sources of financing available to nonprofits.  These hybrid structures allow social enterprises to tap conventional investors interested in making profits while continuing to pursue their social missions.”  But the hybrid model has its downsides.  Conflicting missions from the two companies certainly create problems, and commercial units can be bought out by larger companies, leaving the nonprofit to wobble solo.  In some cases, though, it works well.  Freelancers Union, a nonprofit insurance company, is owned by the for-profit Freelancers Insurance Company, and both are connected to Working Today.   Board members from both non-profit and for-profit sides meet and discuss the most efficient and necessary way to distribute money.  Chief executive Sara Horowitz calls the arrangement “complicated but necessary,” citing that “the structure ensures that there is no way that Freelancer’s Union could be sold for the benefit of any individuals or that the nonprofit could be abused for the benefit of the company.”  Though its a risky endeavor, hybrid modeling is an interesting option in a troubled economy.

New York City runners racing for the Blue Card, a charity that provides aid to destitute Holocaust survivors; photo by Monika Graff for The New York Times

(New York Times)  Despite the October 20th post’s bleak outlook on charitable giving, encouragement is still coming to the nonprofit world in some aspects.  Marathon running is not just a competition or a means to fight heart disease: it’s a race for the common good.  Through the five boroughs of New York, 7,400 runners out of 43,000 will be running the New York City marathon for charity.  Racing 26.2 miles for a cause is old hat in London, where 80% of the total 36,550 competitors ran for charities in 2010, accruing $81 million for various nonprofits.  But the idea is catching on, and rapidly so, in the city of New York.  Eighty-six charity teams will be competing in the race.  Mary Wittenberg, the New York Road Runners‘ chief executive, said, “It’s so compelling.  The potential we have to have a huge, positive impact on these charities encourages us to be really creative and persistent to increase that impact.”

(The Atlantic)  The decline of charitable giving is a hot topic of late, especially given the effects of the extreme economic downturn in 2008.  In his blog on the issue, Daniel Indivigilio cited the Chronicle of Philanthropy’s statistic, averring that charitable giving to the largest 400 charities is down by 11%.  The glaring culprit is, of course, tough economic times.  Even though the economy is enjoying improvement now, citizens are nonetheless replacing losses, not donating to causes.  The Chronicle of Philanthropy expects an increase in donations to charities in 2010–about 1.4% increase, to be precise–but it will take much brighter economic days before that number balloons.

(Bloomberg)  Sixteen employees in a small office a few blocks away from Berkeley are trying to make a difference in the world.  Their company, a Facebook application called Causes, has raised over $16 million for charities, connecting 119 million users to various philanthropic pursuits.  Founded by former Facebook president Sean Parker, Causes is a for-profit company that allows users to give money to various charities.  By selling giftcards in supermarkets, Mr. Parker hopes the name will become more well known and that the company will expand.

(Washington Post)  A 71-year-old philanthropist living in the Pennsylvania suburbs is working toward decreasing unemployment and promoting small businesses, one person at a time.  Gene Epstein has begun a $250,000 effort called Just Hire One.  If a company hires an unemployed person and keeps that person on payroll for at least 6 months, Mr. Epstein will donate $1,000 to a charity in the company’s name.  Mr. Epstein believes that charitable effort is a strong incentive and hopes that his plan will help small businesses get over the tough economic times.  “It’s an encouragement to businesses to not wait,” he said.  “This becomes like an incredible stimulus program.”

 

(The Washington Post)  D.C. Council Member Harry Thomas Jr. has been accused of inventing a “slush fund” by District Republicans.   Mr. Thomas’s charitable program, the Team Thomas/SwingAway LLC program, is not registered with the IRS as a tax-exempt nonprofit, and according to DCRA, its license has been revoked. Accountant Tim Day is bolstered by Republicans and is challenging Mr. Thomas in the November 2 general election.  Mr. Thomas claims that he decided against registering his organization with the IRS because he plans to close it and start another.  However, Mr. Day is not convinced: “This is a fake organization.  If [Mr. Thomas] has truly received money and donations and has given it back to his community, he should be more than willing to provide documentation.”  The charity in question is intended to support young people in the community.  Mr. Thomas is currently developing a list of expenses and donations and plans to make the information public in the next few weeks.

(The Guardian)  According to The Afghanistan NGO Safety Office (ANSO), aid workers are strongly advised to receive permission from the Taliban before working in Taliban-controlled areas.  Statistics show that risks are even higher than they were last year at the same time, and in light of that information, aid workers should take all possible precautions.

(The Washington Post)  Bill Gates has dedicated his $17 million learning center at United Way Worldwide headquarters, located in Northern Virginia.  The learning center is named after his mother, who, Mr. Gates said, first sparked his interest in philanthropic work.  Mary Gates, Mr. Gates’s mother, supported United Way for many years and served on its board.  She died in 1994.  The new learning center features video conferencing facilities and other web-casting technologies so that United Way employees and volunteers can communicate with each other and make progress on an international level.

(IRS)  Don’t forget!  Charities and nonprofits who have not filed for 3 consecutive years must file their tax returns by October 15, 2010.  Useful information for tax-exempt organizations regarding filing and this IRS regulation can be found on the IRS website or linked here.

World Bank president Robert Zoellick

Photo taken from http://www.guardian.co.uk. Photograph: Yuri Gripas/REUTERS

(The Guardian)  President of the World Bank Robert Zoellick ardently warns against withholding donations to poor countries.   Mr. Zoellick has called for donations for the International Development Association (IDA) in order to provide for the world’s poorest countries.  Donations to IDA are especially important, Mr. Zoellick says, because “[l]ack of support for the IDA would devastate the effort to achieve the millennium development goals.  What was very clear to me at recent UN meetings was that it is critical not to see these goals as independent, but to connect the dots that show their inter-relationship.”  Meetings on these international development strategies being in Washington today.

(Bloomberg)  British aid worker for DAI Linda Norgrove was killed October 8 after a rescue attempt by US troops. Initially, it was presumed that Ms. Norgrove’s captors killed her–perhaps by a suicide vest–but recent evidence indicates a grenade submitted by the US might have killed her.  British Prime Minister David Cameron said, “Linda could have died as a result of a grenade detonated by the task force during the assault. However, this is not definite.  This was a very difficult operation. Ultimately, the responsibility for Linda’s death lies with those who took her hostage.”  General David Petraeus has commanded an investigation.

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