June 2011

(Sacramento Business Journal) Following last week’s news that 275,000 nonprofits lost their tax-exempt status because they failed to file the necessary paperwork, the IRS announced that it will assist nonprofits in once again gaining 501(c)(3) status.  In 2006, the IRS issued a regulation mandating that nonprofits had to file annual reports each year—and those organizations which failed to do so would lose their tax exempt status.

While many of those 275,000 organizations are now defunct, some smaller nonprofits who had not taken notice of the 2006 regulations will now need to re-apply for tax-exempt status.  Nonprofits wishing to enter the IRS’s program must fill out an application and pay a fee of between $100 and $850, depending on the amount of the organization’s annual gross receipts.  Applications for tax-exempt status will be followed by an IRS determination letter, and re-granting the organization’s status may be applied retroactively.

The list of organizations that lost tax-exempt status is available on www.IRS.gov.


(Chronicle of Philanthropy) Despite having lost his job as a senior fundraiser for NPR, Ron Schiller is cautioning nonprofits not to shy away from discussing controversial topics with potential donors, including religion and politics.  Schiller was fired from NPR after he claimed that most members of the Tea Party were “racist” to someone who he thought could be a big donor to NPR.  Unbeknownst to Schiller, the person he was speaking with so candidly was recording the conversation using a hidden camera.  James O’Keefe, who is also responsible for similar targeted publicity campaigns against ACORN and Planned Parenthood, later went public with the video.

Speaking in Tampa this week, Schiller urged other fundraisers that donors want to connect with someone real, with real opinions on important issues—not generic “institution speak.”  Schiller urged nonprofit staff to be honest and authentic, despite the fact that such candor may create awkward situations.  Despite the public fallout after his meeting with O’Keefe, Schiller remains optimistic and asserts that he wouldn’t want to change his behavior with donors based on this incident.

Schiller has since gotten a job at a Boston company that recruits staff for nonprofit fundraising.

(Huffington Post) A financial advisor to nonprofits, Commonfund, has released a study of the investment portfolios of 175 nonprofits, concluding that investment returns were about 12 percent in FY2010.  Generally, foundations disburse the interest or return on investment to their grantees.  This signals a second year of growth after a devastating 26 percent decline in FY 2008.

While giving is still not as high as many nonprofits and foundations would like, donations appear to be trending up.  Commonfund’s Executive Director John Griswold, explains:

“Among operating charities, giving was stronger in FY2010, but far from robust. Among responding institutions, 17 percent reported decreased giving in FY2010, a marked improvement over the 38 percent that reported decreased giving in FY2009.”

Last in the chain reaction of economic recovery, nonprofits may still have to wait a while before donations return to pre-recession levels.

(CNET) Called “micro-volunteering,” a new San Francisco-based company called Sparked is connecting corporate employees with nonprofit volunteer opportunities around the world.  Using a volunteering software platform, employees can sign on during their lunch break and complete critical tasks such as language translation, editing, IT assistance, marketing, social media strategy, and more.

Sparked works with 2,500 nonprofits and instantly links them with volunteers, cutting out the tedious process of posting a volunteer ad, vetting candidates, and interviewing.  Instead, individuals can log on to the platform at their desktops, at home, or even on their mobile devices as they commute—and choose from various projects that match their skill sets and interests.

Another company, Catchafire, offers a similar service, requiring a 5 hour per week commitment over three months, and places a greater emphasis on individual participation over corporate employees.

These new companies offer a fast, efficient way for nonprofits to complete vital tasks, while also giving individuals a chance to expand their professional networks, add more experience to their resumes, and give back to their communities—a win-win for everyone involved.

(Wall Street Journal) It’s no secret that California suffers from chronic budget problems.  The most recent item on the budget chopping block is state parks.  On May 13, the legislature voted to cut $22 million from the parks budget, potentially causing eighteen state park closures in the San Francisco Bay Area alone.

A representative from Marin County, one of the areas affected by the cuts, has introduced legislation allowing nonprofits to form partnerships to help fund and run state parks in danger of closure.  One such organization, Friends of Santa Cruz, has already raised $60,000 in 2010 to save the jobs of lifeguards at three state beaches.  Angel Island Immigration Station has raised $11 million to restore buildings that detained Chinese immigrants in the early 1900s—buildings that hold a strong cultural and historical significance for Bay Area communities.  Etched into stone walls during their often long detainment on Angel Island, immigrants’ writings in Chinese characters are still visible today.  The structures on Angel Island form a uniquely important aspect of Californian history, and it would be a shame to lose them because lawmakers in Sacramento can’t find a better way to balance the budget.

Even with the hurried, determined fundraising of these nonprofits, many worry that their actions won’t be enough to save California’s state parks.  Many nonprofits simply do not have sufficient volunteer manpower to run a state park, and all organizations are working to raise funds against a deadline of July 1, when the budget cuts go into effect.

(Nonprofit Quarterly) Smaller nonprofits would be well advised to avoid logos, taglines and slogans that resemble those of larger, established nonprofits—many of whom are resorting to legal action to protect what they call “historic investments in brand and reputation.”

A small group of local volunteers called Mush for a Cure organized a dog sledding event in 2007 to raise money for breast cancer research.  Last year, the group raised $30,000 for the National Breast Cancer Foundation.  They were surprised to receive a letter from an attorney at the Susan G. Komen Foundation, one of many sent out by the leader in breast cancer fundraising for supposed trademark violations.  Komen opposed Mush for a Cure’s trademark application for use of the phrase “for a cure,” commonly used by many smaller cancer-focused nonprofits and grassroots fundraising events.  Komen dropped their opposition to Mush for a Cure’s application after increased media scrutiny, but the story is an important warning for smaller nonprofits.

Mush for a Cure argues that at the end of the day, their small organization shares the same ultimate goal as Komen—finding a cure for breast cancer.  The two organizations should not be wasting their resources fighting each other in court, but instead devoting all their time, energy and money toward that shared goal.  This may be especially true when one side has deep pockets and the other can barely afford to be in court—and donors likely won’t be happy that their money is going toward a lawsuit instead of their chosen cause.

On the other hand, nonprofits often lose brand recognition when another organization appears with a similar name, logo and mission—and such brand recognition is valuable because it directs donors to the right charity.  Additionally, if a nonprofit that shares similarities with another nonprofit violates the law or gets into other trouble, it can tarnish the reputation of the other nonprofit.