Overhead Rhymes with Garlic Bread . . . editor notes issue #96

Editor's Notes - By Jan Masaoka - April 19, 2014

"The time has come," the Walrus said, "to talk of many things:
"Of rent and desks and insurance - and whether pigs have wings.
"Why no one wants to pay for overhead, and all the grief that brings."

Overhead is on the upswing as a discussion topic:

  • Oregon last year passed a law requiring nonprofits to stay under an overhead ceiling - or lose their tax-exempt status, and several other states are considering similar laws
  • Dan Pallotta has raised the question of overhead in catchy, provocative ways
  • OMB (the federal Ofice of Management & Budget) has issued a new Guidance mandating a minumum of 10% overhead in government contracts with nonprofits
  • Guidestar, Charity Navigator and BBB have felt compelled to proclaim that overhead is limited as a measure of nonprofit effectiveness
  • At least four regional associations of grantmakers are holding discussion groups on the topic of overhead in grant budgets

So this issue we're pleased to have "A Funder Talks to Other Funders About Overhead" with grantmaker Unmi Song, and next issue we'll publish "A Board Member's Guide to Nonprofit Overhead."

* Also in this issue of Blue Avocado: HR and transgender employees, "I Followed a Founder," a new approach to board agendas, classic nonprofit jokes, and 40 Inspirational Speeches in Two Minutes. (I love this issue.)

* Please take a moment to look at the right colum and bottom of this page and recognize our advertisers, who help keep Blue Avocado free to everyone.

* And don't forget: pass this issue along to your pals and co-workers! Oh . . . and funders! - Jan Masaoka, Susan Sanow and the Blue Avocado team


A Funder's Message to Other Funders About Overhead

Feature Articles - By Unmi Song - April 4, 2014

This article is adapted from a presentation made to Grantmakers for Effective Organizations (GEO). Our deepest thanks to Unmi Song for speaking these truths:

Good afternoon; I am Unmi Song, President of the Lloyd A. Fry Foundation. The overhead issue is one of the most important - and most neglected - topics that funders should be thinking about and discussing.

There is a lot of buzz around "impact" and "outcomes" and "evidence-based practices." But there is not enough buzz around what it takes for nonprofits to achieve these things.

What I've learned recently is that the assumptions we funders have about overhead are wrong! If we think . . .


Transgender Employees: A Respectful and Legal Workplace Approach

Ask Rita in HR - By Siobhan Kelley - March 29, 2014

Dear Rita: I manage a small team of employees in a close-knit office. Recently one of my employees told me in private that "he" is becoming a "she." I’m not sure how to deal with this. Do I call the employee "him" or "her"? I think when the other employees see him coming to work in women's clothing, they're going to freak out. What if he wants to use the women's restroom? I'm in totally over my head here!

- Sincerely, Trying to Do the Right Thing

Dear Trying: This situation may be uncommon but it doesn't have to be difficult!

Let's begin by getting on the same page with some of the terminology. People whose gender identity is different from the gender they were assigned at birth are generally described as transgender. This term is also used to describe people whose gender expression . . .


I Followed A Founder: a First Person Nonprofit Tale

First Person Nonprofit - By Name Withheld - April 18, 2014

Too often the focus on nonprofit executive transitions is about the departing executive. We're in the middle of interviewing 58 executives who followed founders or long-time leaders. Here's just one of their stories; we'll call her "Amanda":

The job was a dream come true. I had become executive director of a organization where my love and loyalty had lain for years. I had started out there as a volunteer there right out of college. After working at other nonprofits I had come back to this organization - I'll call it CW - as an employee, and had risen to the job of program director.

Less than a year after I became the executive director, the co-founders - who had never fully left the picture - fired me. They had brought in a consultant to "coach" me, and they hired him as the new ED. A year after that this wonderful organization crashed and burned.

This is my story:


And Now for a Different Type of Board Agenda

Board Cafe - By Jan Masaoka - May 16, 2012

Board meeting time is deeply precious time and the fulcrum of board-staff opportunity or disappointment. Let's be smarter about how we use it. Bonus: board meeting cartoon at end of article.

Every third Tuesday, or maybe four Wednesdays a year, a nonprofit board meets and discusses a few topics in order. Here's a traditional board agenda:

Traditional Board Agenda

  1. Minutes approval
  2. Executive Director's report
  3. Program Director report
  4. Finance Committee report
  5. Nominating Committee report
  6. Adjourn

We feel bored just looking at it. The unintentional message: staff is going to talk at us for most of the time and nothing interesting is likely to happen.

Now let's look at doing it differently:


"Classic" Nonprofit Jokes

Point of Vu - By Vu Le - April 13, 2014

Our humor columnist Vu Le is standing at the microphone:

Last week, someone told me I should go into stand-up comedy. Figuring that stand-up probably pays more than nonprofit, I started working on some jokes. Here is the first batch. Try them out at your next annual dinner and you should have people rolling on the floor.


An executive director walks into a bar. The bartender says, "Why the long face?" The executive director says, "My organization is facing financial crisis due to the economy and funders' shifting priorities. We may have to lay off some staff and close several programs, leaving thousands of low-income clients without service."


Knock knock . . .


Take a 2-Minute Vacation Right Now: 40 Inspirational Movie Speeches in 2 Minutes

Nonprofit Life & Style - February 17, 2014

Do nonprofits inspire people? or do people inspire nonprofits?

If you need two minutes of inspiration, enjoy this video that includes such classics such as "A day may come when the courage of men fails, but it is not this day!" and "Clap! Clap! Don't let Tink die!"

With clips from Rocky, Pulp Fiction, and The Mighty Ducks, we think you'll enjoy -and maybe even be uplifted by - the video. And as Brad Pitts says in Troy, "We are avocados!" I mean, "We are lions!"


Notes from the President

Pamela Davis, Volunteer President, American Nonprofits
Pamela Davis
Volunteer President
American Nonprofits

American Nonprofits and Nonprofits Insurance Alliance Group have been cooperating to determine how best to improve access to operating credit for 501(c)(3) community-based nonprofit organizations. During 2012, we evaluated various options. During 2013, we investigated the feasibility of creating American Nonprofits Federal Credit Union (ANFCU) (proposed). We accomplished several steps toward creating ANFCU including:

1)     Received preliminary field of membership approval from NCUA to include 501(c)(3) nonprofits, their employees, volunteers and stakeholders

2)     Conducted an extensive survey of likely members and received evidence of strong likely support

3)     Developed a business plan for the start-up and first 4 years of operation

At a meeting in late summer, interested nonprofit sector and credit union leaders expressed strong interest in, and enthusiasm for, ANFCU. Nevertheless, based...

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American Nonprofits was formed by a group of nonprofit sector leaders with a $100,000 grant from Nonprofits’ Insurance Alliance of California (NIAC). American Nonprofits will serve as a platform to address issues of finance, credit, strategy, and accountability. As a membership organization that welcomes both nonprofit organizations and individuals, we occupy the intersection of finance and strategy. We are a platform through which members can convene local and national discussions, initiate solutions, and collectively improve nonprofit finance (e.g. the credit union project below).
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American Nonprofits Federal Credit Union

Do you think nonprofits deserve fair access to credit and loans?
Do you want to move money from Wall Street and support nonprofits?
Do you want to discuss and improve nonprofit strategy and finance?
Does it annoy you that big banks make profits from nonprofit customers?
We are forming a credit union specifically for the nonprofit community.

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To view the draft business plan for the proposed credit union: Draft Business Plan

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The founding of American Nonprofits as well as the credit union project is possible thanks to a $100,000 grant from Nonprofits Insurance Alliance Group, and an initial $25,000 grant from the Wallace Alexander Gerbode Foundation. American Nonprofits is currently seeking $10.5M in support of formation and capitalization of American Nonprofits Federal Credit Union. Please contact Pamela Davis to find out more about this campaign.


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