DID YOU KNOW? This past Monday, January 21, the country commemorated Martin Luther King Jr. Day, a federal holiday remembering the birth of social activist and civil rights leader Martin Luther King Jr. Officially declared a federal holiday in 1968, Martin Luther King Jr. Day falls on the third Monday of January every year, sometimes falling on King’s actual date of birth. Born in Atlanta, Georgia, on January 15, 1929, King was the second child of pastor Martin Luther King Sr., and former schoolteacher, Alberta Williams King. King emerged as the primary leader of the civil rights movement in the United States in the 1950s and led the country in nonviolent protests until his assassination on April 4, 1968. Throughout history, the nonprofit sector has been and continues to be influenced by the work and vision of Dr. King. In an article from the Chronicle of Philanthropy, thirteen nonprofit leaders weigh in on how charities today can work to advance the goals of social justice and racial equality professed by Martin Luther King Jr. in the 1950s and 60s. To read the article in full, click here. But first, check out these nonprofit headlines!
1. Nonprofits Under Regulatory Scrutiny for Accounting Errors
According to a recent article in the Nonprofit Times, state charity regulators are cracking down on nonprofits failing to correctly allocate joint costs and valuations of non-cash donations, or “gifts in kind,” in their financial statements. Some have accused charities of blurring accounting categories when calculating total spending in order to exaggerate their program expenses and disguise fundraising costs. Many states are alleging that as a result of this inaccurate allocation of joint costs, organizations have made “materially false statements in the financial documents they submit as part of their required state reporting.” To illustrate this point, the article discusses the common use of program resources, such as educational pamphlets, in direct mail solicitations in order to justify the categorization of postage costs as operational or program expenses rather than fundraising. Under current accounting rules, organizations are able to classify costs of activities related to fundraising as “program expenses” as long as a “call to action” is included in such activities. Yet with complex accounting language often leaving room for multiple interpretations and confusion, charities can easily find themselves in tricky positions. “Nonprofit employees are often tasked with applying these complex principles to allocate millions of dollars in expenses without a full understanding of the rules, and their allocations are often not closely reviewed or questioned during the independent audit review process,” the article explains. To read more about generally accepted accounting principles and common mistakes to avoid when allocating funds, visit the article above.
2. Nonprofit Hospitals With Nowhere to Turn Begin Soliciting Patients
The next time you visit your local hospital, your doctor might end up calculating more than just your heart rate. An article published this week in the New York Times reports that more and more hospitals are conducting “wealth screenings” of their patients in order to identify and target potential donors for the hospital. These screenings use software to gather patients’ public records such as past contributions to charities and political campaigns. Once large potential donors have been identified, it is common for hospital executives to visit these patients’ rooms and provide them with extra amenities over the course of their care. Other hospitals instruct doctors to take note of patients who express appreciation for the care they have received in order to add these patients to the list of potential donors. Both of these are strategies of what are commonly referred to as “grateful patient programs.” This uptick in wealth screenings and grateful patient programs arose in part due to a change in a federal health privacy law in 2013 that removed restrictions on hospitals targeting patients for funding. According a survey conducted in 2016 by the consulting firm, the Advisory Board, 68 out of the 108 hospitals surveyed were found to have grateful patient programs. Yet this increase has evoked heightened concerns of the ethics of such programs. Many argue that patients will now worry that the quality of their care could be dependent upon their willingness to open their checkbooks and offer a donation in addition to their own medical costs. Others contend that wealth screenings have been used for years in the fundraising strategies of universities and other nonprofits and, therefore, their inclusion in hospitals should not be vilified. However, according to the article, many ethicists maintain that they present a unique issue for the healthcare system. Nancy Berlinger, a bioethicist at Hastings Center, claims that “eeding health care is different than choosing to go to college or going to the opera.” “When you are sick,” she says, “you need a trusting relationship to be formed and focused on your health. There is a vulnerability there that is not present in other nonprofits.” To learn more about the debate surrounding grateful patient programs and how these ethical questions might apply to your nonprofit’s fundraising strategy, click on the link above.
3. 11 Philanthropic Trends Already Shaping 2019
Leaders at the Dorothy A. Johnson Center for Philanthropy have compiled a list of trends in philanthropy predicted to shape the nonprofit sector in 2019. One of such trends, as identified by Michael Moody, the Frey Foundation Chair for Family Philanthropy, is the increasing overlap of business and charity. While this blurring of lines between the for-profit and nonprofit sectors could lead to confusion and less clearly defined societal roles, it has proven to lead to impressive innovation. Another trend presented by Moody is the correlation between wealth inequality and giving inequality. According to him, as the wealth gap intensifies in the country, “it appears that patterns in giving may follow this dramatic bifurcation.” Tamela Spicer, Program Manager at the Johnson Center, mentions the declining religiosity in Americans as another significant trend that could affect philanthropy in 2019. With religious organizations receiving a lower share of donations in the country and traditional methods of giving significantly changing, we are beginning to see how “nonprofits’ understanding of how faith and spirituality impact giving needs to expand.” The Executive Director of the Johnson Center, Teri Behrens, outlines a final trend to expect in 2019: a decline in foundations focused on long-term change and an increase in those with a defined endpoint. While reasons for this shift vary greatly from foundation to foundation, these “limited-life foundations” have been on the rise for nearly a decade now. To learn more about the trends expected to define the sector in 2019, click on the article linked above.
4. Is a Virtual Workforce a Good Option for Your Nonprofit?
Tighter budgets have pushed more and more nonprofits to explore the shift to a virtual workforce as a strategy to save on administrative costs and create happier and more productive employees. In fact, “according to the Nonprofit Technology Network (NTEN) 2018 Digital Adoption report, 41% of employees at the nonprofits surveyed were working exclusively outside the organization's office delivering programs and services, working from home, or telecommuting.” The survey also found that only around one in nine nonprofit employees split their time between the office other work environments, and less than half of employees work exclusively at the office. In an article from the Forbes Technology Council, Tal Frankfurt, Founder and CEO of Cloud for Good, makes a case for why this trend represents a move in the right direction. Still, while there are many benefits in moving to telecommuting, Frankfurt urges nonprofits to keep a few things in mind during the transition. First, ensure that you have the right people for an at-home work environment. Working virtually can lead to a significant boost in productivity only if you have the self-motivated individuals willing to put into the extra effort to connect with the other members of your organization to get work done in a non-traditional work environment. While technology has made the vision of a virtual workforce possible, it will only get you halfway. According to Frankfurt “just like with any workforce, fostering a welcoming, virtual culture takes intention and time.” To learn more tips on creating a virtual workforce and determine if it is a smart option for your organization, check out the article above.
5. GoFundMe Launches Campaign to Aid Federal Workers During Shutdown
Whether it was to support a classmate’s fund for a volunteer trip abroad or to help ease the burden of a friend’s rising hospital bill, most people have either heard of or donated to a GoFundMe campaign since the popular crowdsourcing platform emerged in 2010. According to an article from TechCrunch, with the partial government shutdown currently on day thirty-five, GoFundMe has recently decided to move from platform to fundraiser by launching a campaign of its own. The goal of the campaign will be assisting the hundreds of thousands of federal workers now looking at their second missed paycheck since the shutdown began. The campaign will be supporting a number of nonprofits, including #ChefsForFeds, a program serving free meals in Washington D.C., and the National Diaper Bank Network, an organization providing essential supplies for parents during the shutdown. Earlier this week, the platform’s CEO, Rob Solomon, emphasized the nonpartisan nature of the campaign. “This is not about politics. This is lending a helping hand to someone in need,” he said in a recent announcement. Between the launch of the initiative and the publication of the TechCrunch article reporting on it, GoFundMe’s campaign has raised over $94,000 from over 1,170 donors with an average donation size of $80. To learn more about GoFundMe’s decision to take a more direct role in fundraising and where the campaign stands, check out the link above.
That’s it for this week’s Friday Five! To read about the National Day of Racial Healing, also celebrated this week on January 22, 2019, check out this article from BoardSource.
Can’t get enough of the Friday Five? Follow us on Twitter, like us on Facebook, and send your questions about the nonprofit world to info@b-alaw.com. See you next week!