For a long time now pursuit of a low overhead ratio has been viewed as a benchmark of good governance in the non-profit sector. There have been arguments against that view, but the perception doggedly persists. Recent research specifically focused on arts and cultural non-profits indicates that these organizations actually need to be spending between … Read more
When I saw a story on Non-Profit Quarterly about four Kalamazoo, MI non-profits entering a shared-services partnership, I immediately assumed it was confined to back office functions as I had written about before. However, that isn’t entirely the case. Moreover, the impetus for their partnership isn’t so much driven by a desire to save money … Read more
Back in September, Non-Profit Quarterly (NPQ) pointed to a new research study which has found overheard ratio is not a valid measure of organizational effectiveness. In fact, it there is a slight negative correlation between overheard ratio and commonly used measures of efficiency. “…but our work is the first to approach it using efficiency theory—and … Read more
You may remember that back in 2012 voters in Portland, OR approved a $35 flat tax to benefit arts education in schools. The tax has survived a number of legal challenges, but according to a piece on Artsy, may fall prey to the dreaded overhead cost beast. Even with the tax’s successes in schools, accounting … Read more
I have to give Brad Shear of the Facebook group Non-Profit Happy Hour a significant tip of the hat for calling attention some interesting information about the non-profit starvation cycle buried in a Harvard Business Review piece about Business Management needing the influence of philosophers. I would likely not have read the piece long enough … Read more
Our friends at the Non-Profit Happy Hour Facebook group shared the Furniture Bank’s Charity Overhead Manifesto. In the post, the Furniture Bank talks about how much damage resistance to covering overhead can do to their programs. We have heard many of these arguments before, but Furniture Bank takes the next necessary step of humanizing and … Read more
FastCoExist recently continued its discussion about how a poor view of non-profit overhead cost is limiting the good such organizations can do by offering some “rebranding” suggestions in order to help change perceptions. As an illustration of how the concept that non-profits must restrict their overhead cost is a severe impediment toward doing good, they … Read more
Something I had meant to mention in my post yesterday was that Priceonomics’ admiration of Yerba Buena’s Dream House Raffle sounded very similar to fund raising philosophy espoused by Dan Pallotta. Said Priceonomics, There is something admirable about Yerba Buena’s Dream House Raffle. Every nonprofit spends a lot of time conducting and worrying about fundraising, … Read more
On Non-Profit Quarterly Claire Knowlton wrote a piece advocating for moving past a focus on overhead costs and direct program expenses in favor of full funding of non-profits by foundations. (Or at least recognition of full costs incurred by a non-profit.) She seems to start from the premise that programs undertaken are essentially jobs non-profits … Read more
You may remember back in January that I wrote about the new rules promulgated by Office of Management and Budget (OMB) requiring that any entity receiving federal funds much cover at least 10% of a non-profit’s overhead costs. Don’t worry, its okay if you don’t remember. But this is relatively important and bears repeating. One … Read more
Back in June 2013, I wrote about the release of a letter by GuideStar, Charity Navigator, and BBB Wise Giving Alliance urging funders to discontinue the use of overhead ratios to measure the viability of non-profit organizations. They felt the number was an inaccurate assessment of an organization’s effectiveness. Since then, the subject of overhead ratio … Read more
Well, the timing could be a little better. Part of the big news today is that GuideStar, Charity Navigator, and BBB Wise Giving Alliance joined together to sign an open letter to all donors asking them not to use overhead as a primary criteria for giving. The letter does a pretty good job in a … Read more
The folks on the Non-Profit Happy Hour Facebook group posted a link to a Ohio State University (I’m sorry, THE Ohio State University) post which claims that charities should not use the word “give” when requesting donations. They say it is a matter of feeling in control of how a donation is used. According to … Read more
Back in 2012, Portland, OR approved a $35 tax to supports arts education and arts organizations around the city. In 2017 I wrote a post about how overhead was starting to cut into the amount of money available to distribute to programs. Part of that overhead was attributable to the fact people weren’t paying the … Read more
Hate the fact that your city will provide millions to fund an arena that only gets used 20 times a year but not arts organizations that each host hundreds of events a year? Concerned that the availability of home entertainment systems with huge screens and gaming systems are keeping people at home rather than participating … Read more
Okay, so I promise I am not seeking out articles that discuss the problems with depending on quantitative metrics to determine effectiveness and value. They just keep falling into my lap. This one is via Dan Pink and is kinda fun to read thanks to some animations. The piece in The Hustle has us follow … Read more
As we move further into the new year, many grant deadlines are starting to creep up en masse upon arts organizations. As you are filling out all the mandatory fields in your grant application, you may be wondering why you have to have a DUNS (Data Universal Numbering System) number in addition to your Employer … Read more
Last month Mural Arts Philadelphia unveiled their first augmented reality mural, “Dreams, Diaspora, and Destiny.” Just like with my post last week about actors being preserved digitally for eternity, I wondered about the implications of this technology. While the physical mural has permanence, there is a lot that can be done with augmented reality to … Read more
Last week Drew McManus did a call out to the non-profit arts community to submit proposals for the Nonprofit Technology Conference in March 2019. (Proposal deadline is August 17) Last year, I was excited by the topic Drew was presenting – “Everything Tech Providers Wished You Knew About Writing A RFP (plus the stuff they … Read more
I recently published a short piece on ArtsHacker about how important the leadership of non-profit board chairs was to the success of the organization. Much of the information was draw from a webinar Non-Profit Quarterly hosted about Board Source’s most recent Leading With Intent report. I just got around to reading the report in the … Read more
I have mentioned before that people don’t normally perceive a difference between non-profit and for-profit cultural organizations. Colleen Dilenschneider has a good summary of the research showing this. What makes people care about the difference between for-profits and non-profits is the positive social impact that the organization is achieving. Dilenschneider writes: Nonprofits do not “own” … Read more
There was recently a piece on The Conversation which, contrary to my expectation, said that tax deductibility rules allow charities to throw high priced galas and still maintain a low fundraising expense ratio. The costs of a fundraising event attributable to things donors enjoy, including food, drink and auctioned items, don’t have to be recorded … Read more
Last week, Non-Profit Quarterly noted that the number of Giving Circles in the US were growing and wondered if this had implications for institutional giving. If you haven’t heard of them before, Giving Circles are usually comprised of a number of individuals in a community who pool their money and collectively make decisions about what … Read more
This really great story on the Americans for the Arts blog caught my eye that I would label as unintentional placemaking. Though I could think of other apt terms. Douglas Sorocco writes about how Oklahoma City law firm Dunlap Codding built an arts and community space as part of the construction of their offices. Except, … Read more
No, this isn’t a moral posting about how it is better to give than get during Christmas. I have been writing a lot recently about the transactional view of arts and culture, namely value is based in economic exchange either directly or in terms of the economic activity it may generate. Given that context, I … Read more
A few months back when Ceci Dadisman and Drew McManus first floated the idea of recognizing Creative Arts Administrators to the rest of us ArtHacker authors, my first thought was that the project shouldn’t just be about who is doing a great job, but rather who you would love to poach from another company. I … Read more
I was surprised by a recent piece on Non-Profit Quarterly reporting the results of a recent study finding that the more successful an arts organization was in attracting an audience, the more donations will decline. The theory the researchers had was that success made an arts organization look less needy. I was skeptical of this … Read more
This morning, The Atlantic published a story about The Plight of the Overworked Nonprofit Employee that addresses the conflict non-profits face between paying employees well and devoting funds to services. While this is not a new conversation at all for those of us in the non-profit sector, it isn’t one that is often discussed in … Read more
Last week I made a post about “rebranding” overhead costs in other terms in order to get away from the associated stigma. Included in the post, I mentioned that a non-profit was being sued by donors for dipping into its restricted funds to invest in the organization’s exploding growth. On the Non-Profit Quarterly website today … Read more
A recent post on Ken Davenport’s The Producer’s Perspective caused me to engage in a bit of internal debate. Ken says a one of the worst things you can do is greatly exceed audience expectations: “..But it also means that before they step into the theater, they have no clue what they’re about to see … Read more
Some time back I read a piece on the Bridgespan Group’s website that made me realize that non-profits and funders/donors may adopt similarly flawed approaches to addressing social issues. When you think about it, it only makes sense that two groups that are passionate and idealistic about bringing change to communities might make the same … Read more
A decision by the OneOrlando fund to distribute money they collected directly to the families and victims impacted by the recent nightclub shooting rather than through charities bears watching. Even while groups are calling for the reducing the use of overhead ratio as a measure of a non-profit’s effectiveness, there is increasing pressure to have … Read more
Via the Marginal Revolution blog, I recently read a piece on Priceonomics about how the Yerba Buena Center for the Arts was using a loophole in California state law to “raise $4 million by selling $10 million in raffle tickets.” Since the authors note that other states have a similar loophole (or lack thereof), I … Read more
In plumbing the old archives to find some entries that might stand the test of time, I found an entry where I cited a suggestion made by The Non-Profiteer that social service non-profits follow the example of arts organization leadership structure. What she was praising was the practice of having an executive and artistic director … Read more
For over a decade now there has been a conversation about how detrimental it can be if an arts organization decides to add new programs in order to qualify for foundation grants and funding. Usually the negative issues revolve around conflicts with core mission and placing additional strain on staff and resources. Until recently, I … Read more
I have a post about board recruitment over on ArtsHacker today where I call attention to a webinar Non-Profit Quarterly recently conducted on the subject. My focus in that article was on how the webinar is a good resource for thinking about how you recruit for and structure your board. But there are a lot … Read more
When I read a post on Marginal Revolution blog about high end stores hiding cash registers in favor of roving sales associates with mobile checkout devices, I immediately wondered if there might be some type of benefit in eliminating or diminishing the physical box office for the arts attendance experience. As such this is largely … Read more
The one activity related to performances that regularly is a source of frustration for my staff is getting certificates of liability insurance from people. This is one of those requirements common to both contracts for venues one is renting to mount a performance and contracts venues/promoters send artists requesting they provide some sort of performance. … Read more
At my day job, we have been looking into the possibility of getting a new ticketing system. We have passed the RFP (request for proposal) deadline and are evaluating the submissions. One of the areas we are really focusing on is customer relationship management (CRM) features because keeping track of all the ways a person … Read more
Since I did a post on ideas that must go earlier this week, I thought it would be a good opportunity to draw attention to a document the Independent Sector put out on Nine Trends Affecting the Charitable Sector. The document is only 6 pages long so it is a quick read, but the point … Read more
Last week I was re-reading a Brain Pickings post I had bookmarked months ago about the book, This Idea Must Die: Some of the World’s Greatest Thinkers Each Select a Major Misconception Holding Us Back. I planned a post asking my readers what idea they thought was holding the arts back. But before I did, … Read more
For about 7 years now I have been paying attention to the basic concept of leadership transition in non-profits. At first there the conversation was about the lack of transition planning with dual concerns about “older executives” not trusting emerging leaders to take the reins and the perceived lack of work/life balance in the executive … Read more
Seth Godin recently linked back to a post he wrote in 2011 about the economics of fund raising galas. To heavily summarize what many of us already know, he points out that it is difficult to get someone to give money to a cause, but if you wrap it in a social occasion, people are … Read more
After reading my post yesterday about how the federal government is requiring that non-profits receive at least 10% of grant/contract funding to cover indirect costs, you may be wondering how to accurately determine direct and indirect costs for your programs. Getting an accurate picture of program costs is not only important for making sure you … Read more
An event of note to be aware of is that last month the federal Office of Management and Budget said “that when governments hire nonprofits to provide services, those nonprofits legitimately need to incur and be paid for their “indirect costs”—which is government-speak for overhead and administrative expenses.” According to Chronicle of Philanthropy, non-profits should … Read more
When I was at the Ohio Arts Council conference yesterday, I attended a session on finance for arts and culture. This is unknown territory for me because I am familiar with grants and fundraising, but don’t really have any significant experience with finance. One of the things I learned were the differences between Community Development Finance … Read more
This story can’t be allowed to pass uncommented upon. Or at least, I feel the need to comment more extensively than did Thomas Cott when he tweeted this link. In a case of damned if you have too much overhead and damned if you don’t have enough, ALS Association is in a panic about their … Read more
A couple weeks ago, Gene Takagi of the Non-Profit Law Blog made a post cautioning lawyers about issues to consider when representing a nonprofit. As you might imagine, every one of his tips were important for members of a non-profit board and leadership to know as well. Some of his traps and tips are frequent … Read more
“Ordinary businesses have clear-cut yardsticks to measure their performance: profits, return on investment, stock prices. But what does high performance mean for a non-profit arts group? A bigger budget? A larger audience? A shiny new building?” You have probably read something along those lines about the difference between for profit businesses and non-profits before. But … Read more
I recently got a little lesson in how easy it is to apply criteria to other people that you resist having applied to yourself. This weekend I was listening to a recent episode of This American Life which was covering the efforts of an organization called Give Directly which gives money directly to the poorest … Read more
I was wondering if you would enjoy that Ray.
Thank you for the post. Simon Rattle and the students made my day!
Santa Cruz Shakespeare has several tiers of benefits for donors/members. Some, like season-announcement parties, are open to several tiers. Some,…