Tag Archives: Endowment

Feedback from You (yes, you): 9 Words That Describe the Nonprofit Arts Issues That Are Placing You at the End of Your Rope

rope

This blog, as most are, is pretty much one-way.  I share experiences, advice, consultation, and observations; you read ’em.  I can discuss 1,000 issues that affect nonprofit arts organizations.

But that’s me.

What keeps you up at night?

What concrete issue (not just “there’s no funding for…”) is fraying your rope?  Or better, what issues are figuratively tying a noose around the end of your rope?

Here’s your assignment.  In 9 words (no more, no less), write that issue and send it to info@137words.com.  That’s it.  Beginning in August, we’ll periodically take each issue and I’ll give my take.  Then we’ll open up the discussion to everyone who reads 137 Words.  Let me know if you’d like your name in or if you’d like to be anonymous.  And if you’d like my help privately, let me know that, too.

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Nonprofit Arts Board Members, Executive Directors, and Staffs: Has Your Board Been Assimilated? Have You?

BORG-CUBE

Board membership for a nonprofit arts organization is a privilege. It requires commitment of time and money.  It requires the urge to change things for the better.

It’s not for self-aggrandizement.  It is not about being thanked endlessly.  It’s not about banquets, galas, and being fed.

It’s a job.

Group thinking can be inspirational, but “groupthink” can poison your organization’s health.  When your board only votes unanimously, for example, or the newly-approved mission is just reverse-engineered to current activities and reduced to pabulum, you may no longer have a board.  You may instead have a Borg.

Borg members wait for orders.  They don’t debate.  Resistance is futile.

The Borg is powerful.  Borg Presidents lead by autocracy.  Borg Queens (often founders) drive staff away by insisting the organization’s activities revolve around them. Borg Drones atrophy.

Board or Borg?

[A Performance] Space: The Final Frontier – Don’t Own It and Find Someone to Donate Some

Don’t own your own performance space.  It’s a liability, not an asset.  Balance sheet be damned.

An asset is something you can sell.  No one wants to buy a theatre…unless it’s to tear it down.  And if it’s an Historic Building, run like the wind.

This isn’t just avoiding an “Edifice Complex.”  Unless, of course, you adore unending capital campaigns to rebuild the defects your company “cheaped out” on.  Find funding for what you do, not where you do it.

That said, one of the most overlooked ways in which a board member can help an organization is to provide eternal, free nearby office space for the company (there’s never enough inside the theatre).  It’s a major tax deduction and the perfect in-kind gift – one that actually removes a necessary expense from the budget.

Good and Bad in Charity Funding

Milk, Nicolas Cage’s acting; mugs saving trees or cups saving wash water; bottled water — good or bad?

Good:

Unrestricted funding.

Ice Buckets/Challenges (unless you’re Charity:Water. Then bad.)

Matching gifts.

Nihil Pro Quo.

Public funding.

Multi-year gifts.

Endowments that cover >20% of the organization’s annual budget.

In-kind gifts that are already in the budget.

Thousands of low-level donors.

Dozens of high-level donors.

100% of trustees/board members donate.

100% of trustees/board members donate one of the 3 highest gifts they give all year.

100% of employees want to at least donate $1.

Bad:

Funding restricted to programs unsupported by the mission.

Funding restricted to vanity projects.

Quid pro quo.

Corporations choosing charities via popularity contests/computer click-offs.

Large donations that overly entitle either donor or recipient.

Endowments that cover <20% of the organization’s annual budget.

Panicky, deleterious “Going-Out-Of-Business-Unless-We-Raise-Millions-By-Tuesday” funding schemes.

Negatively Commenting on the Title of a Post (What You’re Reading Now) is Akin to PETA Boycotting “To Kill a Mockingbird” Because, You Know, They’re Killing a Mockingbird.

Recently, a foundation advocate negatively commented on the title of a 137 Words blog post. On the title, not the post.

As Ben Franklin once said, “We are all born ignorant, but one must work hard to remain stupid.”

Thank you for reading 137 Words and sharing it with your colleagues. We’re pretty amazed when 137 Words evokes derision, praise, or questions.

If you haven’t shared yet, please do – karma will be kind.

In 6 months, 137 Words has picked up about 6,000 readers.  That exceeds all our expectations.  We are truly grateful.

And to those like this advocate who only read the title and not the posting (what you’re reading now), I only wish bliss. Or, should I say, additional bliss.

Harsh?  Maybe so.  Because I am all too often a card-carrying member of the Right to Extreme Stupidity League.

Even Endowments Don’t Want You to Have an Endowment

Went to a foundation’s financial conference a few years back.  Before the economy went south.

The COO of the foundation said (a direct quote), “If you’re not pulling 20% of your annual budget from your endowment roll-off, then you probably shouldn’t have an endowment.”

And now, the math:

Assuming the annual payment is 5%, your endowment would have to outnumber your annual budget by a ratio of 4-1.

Endowments are not reserve funds. They are not liquid. They have little to do with an organization’s stability.  Often, the endowment campaign is successful, but the organization teeters on bankruptcy in vast oceans of red ink.

Endowments do not prove an organization’s worth, nor does it assure its future. Although, I suppose, it does offer a bankrupt organization the chance to pay off its bills before closing for good.  So there’s that.

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