Wednesday, April 15, 2020

Coping With the Impact of Coronavirus

As shelter in place orders keep expanding, with no real end in sight, every nonprofit in the country has needed to completely re-think their work, their staffing, and how to navigate this crisis. 

Here are a few things you should know:

IRS Form 990 deadline extended: The deadline for filing your 2019 form is now July 15. You still have to file, but you have more time to pull it all together.

The stimulus bill includes nonprofits: This includes the Paycheck Protection Program, Economic Injury Disaster Loans, payroll tax deferral, and an employee retention credit.  But…the process has been chaotic and problematic. 

Resources for assistance with stimulus bill programs: Check the SBA website for detailed information at https://www.sba.gov as well as the SBDC (Small Business Development Center) in your area. Consider reaching out to community banks that have been more receptive. And do not hesitate to ask for help and assistance from district staff for your Member of Congress.

Charitable tax deductions: The stimulus bill expands the charitable deduction to all taxpayers for one year.  It will allow non-itemizers to deduct up to $300 in cash giving for the 2020 tax year. For itemizers, the bill lifts the cap on annual giving from 60% to 100% of adjusted gross income. 

Here are some things you should be doing:

Stay in touch: Check in with your members, donors, and clients via phone, Zoom, email, and mail to see how they are doing. Let them know both how much you value their support and how you are managing the crisis.

Connect virtually: Send weekly enewsletters with updates as well as virtual connections including on-line classes, videos of performances, and any funny messages/jokes you can find. Right now folks need every opportunity they can get for connection, music, song, art, and laughter.

Connect your work to the pandemic: Are you helping out with food drives, distributing masks, providing books or learning opportunities for kids and seniors? Let folks know, and invite them to help out in any way possible – making soup, sewing masks, calling isolated seniors.

Update your website: Make sure your website has current information about closures, ways to connect virtually, and ways to help out.

Give people the opportunity to give back: If you have cancelled events and programs, give folks the choice of donating the fees back to support your organization. And don't hesitate to gently ask folks for basic charitable donations; history tells us people continue to be generous during crises like these. 

Participate in Giving Tuesday on May 5: You’ve probably already been doing this around Thanksgiving; there’s a new campaign aiming to support nonprofits right now. 

Diversify your funding: If your income is heavily weighted towards grants, either from foundation or government grants, start working now to broaden your funding base. These nonprofit income streams are going to decrease substantially, just as they did 2008.

Encourage your members and clients to fill out their U.S. census forms: Data from the census determines how much government funding will come to your city, county, and state to support nonprofits, local governments, and schools (not to mention defining how many representatives you have in Congress). It’s easy and essential; do it now at https://2020census.gov.

None of this is easy - it's heartbreaking to cancel programs, close facilities, worry all the time about your nonprofit's future, and lose personal connections. It's going to a long haul - but we will get through it together with grace, a sense of humor, and hope for a better new world.


Tuesday, March 17, 2020

Coronavirus Crisis Hits the Nonprofit Community

Social distancing. Limits on group gatherings. Fundraising event cancellations. Programs curtailed. Venue closures. Working from home – or not working at all. 

The coronavirus has hit the nonprofit community, and the impact will be huge. It’s likely that program income will decrease, and fundraising income as well. You may have to lay off staff. Many venues, especially those that present public events and programs, have been forced to close. Others that provide basic services and food to the homeless and low-income folks have been slammed, while volunteers are scarce and employees are staying home.

Here are some specific areas of concern:
  • Stock market decline and recession: At a time when charitable needs will soar, wealthy donors and foundations will suffer losses and cut back on giving. And foundations are legally required to give away 5% of assets a year; that amount will plummet along with the value of their investments. 
  • Charitable donations: As happened in the last recession, all charitable donations will probably decline. Note that in 2008, giving plunged by 5.7%, the steepest decline since Giving USA began its survey in 1956.
  • Venue closures: Arts organizations that depend on income from participants at ongoing exhibits and performances will be especially impacted. As well, folks are less likely to prioritize donations for the arts during an emergency situation.
  • Fundraising events: Galas and fundraising events for many nonprofits that take months to plan have been cancelled.
In the midst of this crisis, here are some things you should be doing, and some issues you should be addressing:
  • Capital reserves: I am hoping you have exercised prudent management and have a reserve fund with enough money to cover six months of operating expenses. If you do: kudos - and now is the time to use it. But I’m betting many of you don’t. Perhaps you had one for a while, after the 2008 recession, and then your board and leadership let it slide, or used the funds for new programs. Here I’d like to quote one of my father’s favorites: “Experience is when you make the same mistake a second time and recognize it.”   
  • Paid sick leave: I am also hoping your organization has in place paid sick leave for your employees - and that your workers are actually employees, rather than independent contractors, so they are covered. So many small nonprofits I see are focused on saving money at the expense of treating folks in a humane way. If you're one of them, now is the time for change.
  • Remote work capacity: You should assume crises like these will happen again, figure out an emergency plan for your staff to work remotely, and train them in how to do so on a yearly basis.
  • Increased demand for services: If your agency serves low-income folks and provides for basic needs (food, shelter, medical assistance), you’re going to be slammed because so many folks will need assistance. You should immediately be in touch with your local and state government representatives to find out what kind of help they can provide you.
  • Communication: Stay in touch regularly and honestly with your clients, members, foundation contacts, local government officials, and donors (small and large). Don’t sugarcoat. Ask them for help.
  • Fundraising: And keep asking them for money, with thoughtful and appropriate messaging – via email, phone calls, mail, your website, Facebook, and whatever social media you use. 
This too shall pass. Keep breathing. Shelter in place. Cherish your friends and family. Take care, and stay healthy.

Friday, December 13, 2019

Year-End Nonprofit News Roundup

Here’s an update on some key nonprofit issues I have written about in the past year. 

There’s bad news…

Child Detention Centers: New government data shows that an unprecedented 69,550 migrant children were held in government custody over the past year. That's more than in any other country, despite the U.S. government's acknowledgement this puts children at risk of long-term physical and emotional damage. And even after Congress approved a $4.5 billion border aid package, many children continue to sleep in cold cells without proper clothing or food.

Abortion Rights: The Trump Administration established new rules stipulating that recipients of federal funding cannot refer patients to abortion providers. This effectively defunded Planned Parenthood, while making a huge pot of $60 million a year suddenly available to the anti-abortion movement's so-called crisis pregnancy centers. These centers mislead women, provide limited services, and essentially exist to coerce pregnant women into carrying pregnancies to term. In addition, most are supported by religious institutions that also oppose the use of contraceptives as a matter of “staying true to the standards set forth in the Bible for sexual behavior.”

And this...

National Rifle Association: So many scandals have emerged in regard to the NRA that it’s hard to know where to start. First there were revelations that CEO Wayne LaPierre spent hundreds of thousands of dollars on clothing and travel, and that the organization considered buying him a multimillion-dollar estate. Marion Hammer, a past NRA Board  president and current ED of an NRA affiliate, took out below-market value loans to refinance and purchase homes, which likely violate IRS guidelines. And eighteen board members received thousands of dollars from the NRA in the past three years for various services. According to nonprofit tax attorney Daniel Kurtz, "Most groups lean on board members to give money, not for board members to get money." The NRA currently faces several investigations including one into its finances by New York’s attorney general, and a congressional probe into its potential ties to Russia. 

And my absolutely favorite good news...

Trump Foundation: I am thrilled to report that The Trump Foundation is no more, per final decisions in the New York court case. The Foundation was ordered to pay $2 million in damages for misuse of funds - a remarkable and unprecedented rebuke to a sitting president. This money, along with the remaining $1.8 million left in foundation funds, has been split between eight charities: Army Emergency Fund, Children’s Aid Society, Citymeals-on-Wheels, Martha’s Table, United Negro College Fund, United Way of National Capital Area, U.S. Holocaust Museum, and Give An Hour. And Trump has agreed to special supervision if he ever returns to charity work in New York. According to Attorney General Letitia James, “My office will continue to fight for accountability because no one is above the law – not a businessman, not a candidate for office, and not even the president of the United States.”

Wishing you all a happy holiday season, and hoping for a better year for the country in 2020.