DID YOU KNOW?  This week marked the 73rd anniversary of the official creation of the United Nations (UN) through the ratification of the UN Charter on October 24th, 1945. This day has been celebrated as UN Day since 1948. In 1971, the UN General Assembly declared it an international holiday and recommended that it also be observed as a public holiday by member states, hoping that this day will help spread awareness of the mission and achievements of the UN worldwide. Every year, the organization sponsors several events to call attention to this day of commemoration. One of these events is an evening concert in the General Assembly Hall at UN Headquarters in New York. The theme of this year’s concert is “Traditions of Peace and Non-Violence” and features Ustad Amjad Ali Khan with his two sons as well as the Refugee Orchestra Project, conducted by Lidiya Yankovskaya. A photo exhibition to celebrate the day has also been installed in the UN Headquarters lobby and will remain there until November. Entitled “People on the Move,” the photographs challenge their audience to consider the struggles and humanity of the millions of migrants and refugees across the world over the last 70 years. It depicts personal stories to encourage viewers to think about these migrants’ individual struggles rather than simply their role as part of a daunting statistic. But before learning more about UN Day and planning your celebrations for next year, check out these nonprofit headlines of the week.

1. Financial Literacy on Your Board

The financial literacy of your board members is crucial to maintain your organization’s fiscal integrity. Having board members who do not understand the organization’s finance puts you at risk of dangerous miscommunication and even potential mismanagement of funds. An article from Nonprofit Quarterly (NPQ) tells of an instance of alleged embezzlement by a board member of the Springboro Clearcreek Baseball Association and warns nonprofits of the dangers of failing to ensure the financial literacy of its board members. While it is unrealistic and typically undesirable to have a board made up entirely of certified public accountants (CPAs), “every board member must be engaged in the organization’s financial processes, and be confident and comfortable enough to thoroughly review financial information, and especially to ask questions.” Relaying this financial information will undoubtedly take time – time that most nonprofit leadership teams do not necessarily have. So, if a similar body does not already exist, your organization might want to consider creating a finance committee to help maintain this financial literacy and transparency among your board members. If nothing else, the creation of this group will ensure that financial processes are being overseen by multiple bodies, rather than the one trusted CPA on your board. While the composition and function of your committee might be limited depending on the portion of your staff and budget you can realistically allocate to it, adding any kind of financial oversight certainly can’t hurt. To access more resources to help you improve the financial security and oversight of your nonprofit, take a look at the list of research papers and webinars compiled by NPQ in the article above.

2. Resistance to E-Filing: Why Some Nonprofits Still Prefer to File the Old-Fashioned Way

In an age where paper forms have become nearly obsolete, it might be shocking to hear that some nonprofits still choose to file their tax returns the old-fashioned way. According to data published by the Chronicle of Philanthropy, “one third of tax-exempt organizations that file commonly used annual forms choose to submit paper forms.” The IRS reported that of the 990 and 990-EZ forms filed in 2017, only 68 percent were filed electronically.  Many have criticized nonprofits who opt out of the online filing option, claiming that they are making it much harder to accumulate and analyze data to better understand the sector. Filing electronically, according to these critics, also helps grant-makers and general donors decide where to direct funds, allows nonprofit leaders to compare their finances with others, and makes it far easier for law enforcement and regulators to identify suspicious transactions. Nonprofits who defend their continued use of the paper forms cite different reasons for their resistance to electronic methods. Some, including the Conrad Hilton Foundation, claim they have been late to adopt this new filing method simply because the IRS has yet to require them to do so. This might not always be the case, however, as the House of Representatives recently passed a bill that would gradually incorporate an electronic filing requirement, with similar legislation in the works in the Senate. Others argue that the electronic form is far more restrictive in terms of the amount and content nonprofits can provide, and that the online forms are far from user-friendly. And it’s not just small charities who are rejecting online filing options. Bank of America Charitable Gift Fund and the Goldman Sachs Philanthropy Fund are among the many larger-scale charities still submitting paper forms. To find out more about why paper forms remain popular among nonprofits more than a decade after the IRS introduced the option of e-filing, check out the link above.

3. Debunking the Overhead Myth: How to Advocate for Your Organization’s Needs

Nonprofits of all shapes and sizes struggle to find funding and secure grants to carry out their services. Far more difficult, however, is convincing donors to provide funding for strictly administrative or overhead costs like insurance, salaries, and rent. An emphasis on charity rating systems in the last few decades has made securing such funding that much trickier. Although clearly well intended, these rating systems have put pressure on nonprofits to minimize overhead costs and report ever higher percentages of funding allocated for programs. According to an article in the Chronicle of Philanthropy, donors now expect nonprofits to spend at least 80 percent of revenue directly on program implementation. Therefore, many organizations, try to avoid directly asking for overhead costs funding altogether, worried that “charity watchdog” groups will be quick to label them as misusing funds. A survey published by the Nonprofit Finance Fund in 2015 showed that “only 31 percent of fundraisers said they felt they could talk to donors about the need for general operating support.” Yet obtaining such backing might be a key step in improving your organization’s infrastructure and reach. The question, therefore, is not whether you should seek out this funding, but how to approach the conversation to see the best results. Kathleen Enright, President of Grantmakers for Effective Organizations, tells nonprofits that foundations are more likely to fund general operating costs when they are linked to initiatives of diversity, equity, and inclusion, and when organizations have made personal ties with the communities they serve. Other strategies to build the trust of your funders and procure donations for overhead costs include providing them with detailed reports of your operating spending, or holding quarterly one-on-one meetings to discuss your organization’s spending and its needs. Yet opening up this dialogue with your donors is only the first step. Your donors will also likely have to change their own attitudes on the necessity of overhead costs if we hope to reverse this “overhead myth.” According to Belen Vargas, the Senior Vice President of the Weingart Foundation,“the burden is on the foundations to create an environment for the organizations to feel safe to share their greatest needs and priorities.” For more tips on how to advocate for overhead cost funding for your nonprofit, visit the article linked above.

4. How to Improve (or Create) an Effective Executive Team

While the use of executive teams in the for-profit sector has been much more thoroughly explored, these teams in the nonprofit sector are often underutilized. In fact, according to a recent Bridgespan group diagnostic survey, “only 19 percent [of the 362 executive team members surveyed] strongly agreed that their team focuses on the right work.” An article in the Stanford Social Innovation Review examines the potential of executive teams and offers strategies to help nonprofits increase their effectiveness. An executive team, or a group of “senior leaders who work together to chart the organization’s direction and keep it on track toward its goals,” differs from groups of senior managers who meet periodically with CEOs to hear reports of recent decisions and report on day-to-day operations. An executive team functions as one entity rather than heads of different departments, helping to advise the CEO and shape decisions that will affect the entire organization. While the composition of an executive team will certainly depend on the size, budget, and capabilities of a nonprofit, the effective development of any such team will require the active participation of the organization's CEO. According to the article, the involvement of a CEO is only one factor to consider to guide the development of your executive team. Other factors include ensuring that the team is focused on the most interdependent issues of your organization with the highest stakes, and making sure the team composition is simple enough to be manageable. To find out more about what you can do to create a successful executive team that serves as an asset rather than a burden to your organization, check out the link above.

5. Building Cultural Bridges to Promote Global Collaboration

Organizations have long been struggling to effectively share their messages across borders in an increasingly globalized world. Nonprofits are no exception. In an article from the Forbes Nonprofit Council, James Da Costa, Head of Partnerships and Innovations at China Africa Tech Initiative (CAT-I), offers a few helpful tips on how organizations can work through cultural barriers to collaborate with groups around the world and achieve shared objectives. One such tip emphasizes the importance of not only acknowledging and celebrating differences, but also of looking for common ground. Finding similarities, no matter how nuanced or seemingly irrelevant, will help your organization build cultural bridges to develop a strategy requiring neither collaborator to veer too far from typical operating practices. Da Costa uses the Chinese concept of “guanxi,” or “relationships,” to illustrate this suggestion, claiming that the incorporation of guanxi into business is extremely important in Chinese and many African cultures. Another tip urges nonprofits to consider the value of face-to-face interaction. While it can often be difficult to find time to meet even with those in your immediate office space (let alone those in different time zones), making time for a voice or video call is essential when working with a diverse range of cultures. Solely communicating by email poses the risk of messages getting lost in translation, either due to varying cultural interpretations, physical language barriers, or lack of any detectable tone. In his work with CAT-I, Da Costa claims that only by “combining our personal narrative with our fact-based achievements,” was his team able to gain the trust of stakeholders. So, in order to convince stakeholders that such collaboration is possible, make sure to provide factual instances where your collaborative efforts have led to success, but do not be afraid to share your personal connections to these efforts. For more tips on how to effectively collaborate across cultural and geographical lines, check out the article above.

That’s it for this week’s Friday Five! To learn more about United Nations Day and what people are doing around the world to celebrate, visit this link to the UN website.

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