97, 98 , 99 . . . Editor notes issue #99

Editor's Notes - September 6, 2014

Amazingly, this is the 99th issue of Blue Avocado. Hurrah! It's an honor to produce something that so many people enjoy . . . we can hardly believe there are 64,000 of you subscribers!

The most common question we get: where did the name come from? So as we approach our 100th issue, we'd like to tell you.

A long long time ago in 2008, we (the Blue Avocado Steering Committee and me) came up with two potential names for this new online magazine. We asked focus groups around the country to weigh in on them. Most of the focus groups split 50/50.

When this data was presented to the Steering Committee, I expected them to pick one of them. Instead, they said (very insightfully) that these results indicated that neither name was very good. We all wanted something that would stand out from the crowd. After a couple of hours of brainstorming and pondering, when Nelson Layag of CompassPoint suddenly shouted, "Blue Avocado!" it just felt right.

Then we retrofitted a "lore" . . . that blue avocados were a sacred fruit of the Maya, lost in the Conquest. But a few seeds were hidden . . . you get the idea. But too many people believed us and sent notes asking for seeds! So now you all know the true, odd story.

Blue Avocado is its own true, odd story of course, and one aspect of the nonprofit sector we celebrate is all of our true, odd stories. How does a group of people running around the forest become a tribe? By sitting around the campfire and telling our stories to one another.

But as you know, blue avocados don't grow on trees. We need your financial help. We're like public television: free to watch, but we ask for your support. In our next issue, we'd like to thank everyone in the next issue who makes a donation from $5 to $5,000 before then, and we'll publish as many anniversary messages as we can as well. Please consider joining our tribe by donating here and sending your message here.

* In this issue we have a First Person Nonprofit story by a consultant-turned ED who learns why consultants never fail, a comprehensive guide to the legal and accounting aspects of auctions, a Board Member's Guide to Nonprofit Overhead, and to lighten things up, a great piece by our humor columnist Vu Le. Enjoy! - Jan Masaoka

 

A Board Member's Guide to Nonprofit Overhead

Board Cafe - Finance & Strategy - By Jan Masaoka & Steve Zimmerman - September 1, 2014

Calculating overhead rates and managing overhead expense are important staff roles. Board members are not required to know how do staff accounting work, but we do need to bring an informed perspective to our oversight:

Harvard's indirect cost rate is 68% while Iowa State's is 48%. Should the board members of either institution be concerned? As a alumnus of one or the other, should these numbers affect our donations? As a parent of a high school senior, do these numbers influence where we want our child to go? Should they?

Amid the crosstalk about nonprofit overhead, board members and staff do need to understand what the conversation is really about, and how to interpret "what is overhead" for your own organization. Here are eight key things to know about overhead:

1. Apples, oranges, and alligators: One of the more surprising facts about overhead is that while it seems that everyone is talking about it, everyone is actually talking about the different things. The word "overhead" isn't an accounting term, so different people define it differently.

Some accounting terms which are similar to “overhead” and often confused with it are:

  • Indirect costs
  • Administrative costs
  • Shared costs
  • Fixed costs

In one study, respondents were asked which of the above was the closest synonym . . .

 

Nonprofit Auctions: A Complete Compliance Guide and Sample Forms

Finance & Strategy - By Dennis Walsh, CPA - May 17, 2014

Auctions are known for two characteristics: they raise money (sometimes a lot), and they are a ton of work. Blue Avocado contributor and CPA Dennis Walsh gives us a complete, handy compliance guide, and even better: five sample forms to make sure your wording is right:

Charitable auctions have stood the test of time as a great way to leverage our consumption-oriented culture for the benefit of nonprofit efforts. And while auctions have been traditionally held at special events, online auctions have recently increased in popularity, making it easier for volunteers and allowing people to bid from their homes and over an extended period of time.

But whether an auction is live, silent, or online, there are compliance issues. This article presents an overview of key charitable auction compliance issues and how to use donor education as part of compliance. With this background, and the sample worksheets and forms included, you can more easily meet reporting responsibilities . . .

 

Crawling Out of the Psychological Depths

First Person Nonprofit - By Marilyn Neece - August 14, 2014

Most of us have had moments of despair. Marilyn Neece very generously shares her story with us:

It's hard to say this out loud. I lost my edge. I went from sharp-minded and insightful consultant to a tired and nearly burnt out executive director in just three short years.
I know the board is wondering if I'm all right. It's humiliating. They hired me to make the great turnaround. We started with such energy and focus. But then . . . life is very different from those case studies in Harvard Business Review.

It started out great

My organization is a small mental health counseling center that was founded 35 years ago by several churches. It's a neighborhood place. We still have Christian counseling for those who want it, but we are mainly secular, and we offer counseling in a number of languages.

I've been a successful executive director in the past. I know about boards, strategic plans. I was . . .

 

If You Give a Board Treasurer A Cookie . . .

Point of Vu - By Vu Le - September 6, 2014

Blue Avocado columnist Vu Le inspires us again with his ideas for nonprofit-themed children's books. We should all be writing some!

Today, I want to talk about children's books. I am so sick of these children's books that my one-year-old makes me read each day. You try to see how charming "Guess How Much I Love You" is after the 80th time!

But then I got this great idea! I should write children’s books! They are short as hell! And if one becomes a best-seller, I’ll be rich, rich! The conventional wisdom is to write about stuff that you know. And what do I know? Nonprofit work, of course. I can write children’s books about nonprofit work!

Here are some that I've started working on. Just imagine parents reading these books to their kids each night. Maybe these books might even inspire some kids to grow up wanting to be nonprofit warriors. Read these texts below, and let me know what you think, and other children’s book ideas you have.

The Runaway ED

Once upon a time there was an executive director, and she wanted to run away. So she said to her board chair, "I am going to run away."

 

Take a 3 Minute Vacation Right Now and Have Some Laughs

Nonprofit Life & Style - September 7, 2014

Today's politiquette tip: don't tell a person using a wheelchair, "I don't think of you as someone in a wheelchair!" Or more commonly: "I don't think of you as a minority!" said to people of color. The implication, of course, is that the listener has managed to transcend being from a group of less-thans, and the speaker is, of course, congratulating himself or herself.

Exception to this rule: lawyers seem to love to be told, "You don't act like a lawyer!"

If this is confusing, watch this funny video: "If Black People Said What White People Say."

 

Notes from the President

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

We at American Nonprofits remain keenly interested in working to find ways to improve nonprofits’ access to capital.  We are currently collaborating with Nonprofits Insurance Alliance of California (NIAC) in some work they are doing to develop a scoring model to evaluate creditworthiness of nonprofits.  They also recently launched a $1 million loan fund to assist their members, while at the same time honing this credit scoring model.   In addition to continuing to look for ways to improve nonprofits’ access to capital, the American Nonprofits board of directors recently has developed a concept paper to better describe our aspirations for this American.  We welcome your feedback. > Read More

Join the Discussion

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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