From Big ideas

A salute to the US National Park Service

From the mission statement

Crazy Jug Point at Grand Canyon National Park North Rim

“The National Park Service cares for special places saved by the American people so that all may experience our heritage.”

On our recent vacation, we had the great fortune to experience some incredible natural and cultural sites of the US National Park Service, among them:

Thank you to the past Congresses and Presidents who had the foresight and wisdom to preserve and maintain these extraordinary places for future generations.

And thank you, National Park Service, for your graciousness and welcoming presence. We were happy to see our tax dollars working for the enjoyment of so many people, from all around the world.

Rethinking the finance committee

But what if instead of these solely fiduciary roles, the Finance Committee also facilitated strategic thinking within the Board about the short and long-term financial condition of the organization by: developing a deeper financial analysis of organizational health, developing financial literacy among the directors, analyzing trends, preparing long-term financial forecasts based on different strategic scenarios, bringing strategic financial issues to the attention of the board for discussion and planning
and leading the discussion on key performance indicators for the Board and then revising financial reports accordingly

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Nonprofit survey: expect to do more with less

Nonprofits expect to serve more people in 2012, yet they also anticipate reduced revenues from major funders, particularly state and federal grants and contracts, according to the 2012 State of the Sector survey from Nonprofit Finance Fund. The 2012 report extends a dramatic three-year trend of  steeply rising demand for services in the face of declining revenues. Sixty percent of those surveyed don’t believe they can meet the anticipated need for their services this year.

The survey is the latest of five conducted in two-year intervals by Nonprofit Finance Fund. While the survey does not represent a statistically valid sample of all U.S. nonprofits, the number  and diversity of respondents (4,500 nonprofit managers from representing all major nonprofit fields and a range of annual budgets) does create a revealing cross-section of American nonprofits.

The financial squeeze has been particularly tough for nonprofits addressing child poverty, housing insecurity and homelessness, hunger and other human needs that have exploded during the last four years of economic decline and dislocation. These service providers take the brunt of state and federal disinvestment in social services and penny-pinching tactics such as delayed reimbursements.

More than three quarters of nonprofits said that state and federal funding did not cover the full cost of services provided. Sixty-six percent of respondents affected by government cutbacks and shortfalls dipped into reserves to meet the excess cost of services. Among all nonprofits responding, 57 percent said they had only enough cash on hand to meet operating costs for three months or less.

It’s not what you know, it’s who you hang out with

Nonprofits spend a lot of time and effort trying to change what other people do, from influencing a teen to quit smoking to getting a prospective donor to write that first check. Why is it that our most logical arguments and most eloquent appeals so often fall on deaf ears?

Because behavior changes like these are driven by face-to-face contacts and peer pressure, not our logical minds, according to Alex Pentland of MIT’s Human Dynamics Lab, interviewed on NPR’s Here and Now recently.

“We’re not really as rational as we think we are.” he told Here and Now host Robin Young. “If you want to change their behavior, giving people arguments is probably the wrong thing to do.”

Pentland studies human behavior using smart phones and other devices to track his subjects’ every movement and social interaction. He also uses phone polls to supplement the tracking data with subject reports on everything from their opinions to their weight. These “digital bread crumbs” give Pentland a huge amount of new and highly accurate data about what people really do all day (and night).

“What are the behaviors that lead to decisions?” Pentland asks. In study after study, he finds that it’s who we spend time with, not what we learn consciously, that predicts our decision-making. “Most of the decisions you make about behavior are ‘when in Rome do what the Romans do’ behaviors.” Read more

What one book changed your professional life?

Reading Stewardship didn’t actually shift my values … instead, it was a bright illumination of my own thoughts about my role in life, about governance and management, about working in organizations and about serving my community. I’ve always been drawn to a life in the social change sector. Whether volunteering, working at a nonprofit, or serving nonprofits through my consulting practice, service has always been integrated into my life, never just an appendage to the other things that I do.

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Remembering what we know: two landmark social enterprises

We think of social enterprise as a new trend. So, would you be surprised to be reminded that two of the nonprofit world’s most successful and transformative social investments were made more than 30 years ago? Muhammad Yunus started The Grameen Bank project in 1976. The Local Initiatives Support Corporation (LISC) was founded in 1980.

Both new enterprises got key early funding from “program-related investments” (PRIs) by the Ford Foundation.  Both used familiar financial tools in creative ways to benefit people who were otherwise unable to access financial services. In both cases, that seed funding, given as loans, helped attract many millions more in public and private investments.

Grameen launched a new and profitable global financial services industry serving very low-income people. Mohammad Yunus won the Nobel Prize in 2006 for this achievement. LISC played a pivotal role in creating a powerful national network of local community development corporations (CDCs) in the United States. The CDC movement has transformed devastated and endangered neighborhoods in the United States by restoring millions of homes as well as commercial centers and public amenities.

Program-related investments (PRIs) by charitable foundations, have been around since the Tax Reform Act of 1969. The Act allows foundations to include loans, equity investments or financial guaranties for mission-related purposes (program related investments) to be counted toward their asset disbursement requirements just as they would count a grant.

PRIs can launch revolutionary innovations in meeting social needs and they have clear financial benefits for foundations. Yet, only 173 out of 75,000 U.S. foundations made PRIs in 2006 or 2007, according to Doing Good with Foundation Assets, a 2010 study from the Foundation Center. Why are they so rare?  I’ll take a look in my next post.