Future PhilanthropistsFramingham State UniversitySpring 2012

Our purposeGive away $5,000 (it’s harder

than it seems)

To do it, we look at:Who we areWhat we valueOur “programmatic” interestsThe needs of the communityThe organizations meeting those needsThe intersections of 1) our

values/interests, 2) community needs, and 3) organizations that, in your assessment, have the ability to effectively meet those needs.

What is philanthropy?Philanthropy is the giving of time,

talent, and treasure for the common good through◦Volunteering◦Financial support◦In-kind support◦Advocacy and social activism◦Research

Overview of the Nonprofit SectorNonprofits are one of three

sectors (the other two are for-profit and public)

“Nonprofit” doesn’t mean that you can’t make money; it means that any surplus is put back into the organization, rather than divided between owners or shareholders

Nonprofit sector includes foundations that provide financial supports

How is this sector different?Focus on community and quality of lifePicks up the tasks that are citizen-

oriented but that government cannot do or should not do (examples?)

A lot of trust involved—from those receiving the services and those supporting the service financially

Focus is on organizational goals, not financial ones

Nonprofits are businesses!

Nonprofit Sector nationallyMore than 1.5 million nonprofits20,000-30,000 new nonprofits

started each yearUS nonprofit sector is the sixth

largest economy in the world—bigger than the entire economy of Canada or Russia

Areas of mission focusHuman services (aka social services)

(30%)Health (20%)Education (20%)Youth and families (can overlap with

other areas)Environment (9%)Arts and culture (13%)Housing (5%)Human rights (3% domestically)

How many nonprofits?Officially, 35,000 in Massachusetts (but

many no longer operating)Includes Scout troops, PTOs, youth

soccer clubs, garden clubsOnly about 4,000 seek grants16.7% of Mass workforce works in

nonprofits (where are they employed?To find out how many in your town, go to

◦http://nccsdataweb.urban.org/massNonprofits.php

How big are they?An organization’s “size” is

measured by its annual operating budget

80% of all Mass nonprofits have annual operating budgets of less than $100,000; many have less than $10,000

What can an organization do with $100,000 annually? Can you run a food pantry? Animal shelter?

The organization’s MISSIONA mission is the need the

organization meetsA mission statement is a

compelling, “tool” that explains the primary purpose and value of the organization. It should answer: why we are here, what we do (broadly), and for whom.

The mission guides decisions about programs, services, and funding.

Sample mission statementsOrganization for the Assabet

River◦Protect, preserve and enhance the natural

and recreational features of the Assabet River, its tributaries and watershed

HOPE◦To counter violence and promote peace

through education, leadership development and mentoring

◦ (Notice that the mission statements don’t explain HOW in much detail; this provides some flexibility in their services)

GovernanceGoverned by a volunteer board of 6-

30 peopleManaged by an executive director or

CEO (some effective nonprofits have no staff)

Board has ultimate responsibility for the organization’s financial sustainability through◦Revenue-generation (fees, donations)◦Sound budgets for programs/services

What does the staff do?Deliver programs and servicesStrengthen the “capacity” to

deliver programs and services◦Fundraise◦Operations◦Financial and other management◦Recruit and manage volunteers◦Be an active and visible partner in

the community

Nonprofits as economic engine in Mass.•Employ almost 17% of workforce (national average is 10% of workforce)•57% of nonprofit jobs nationally are in health care (hospitals, nursing homes, health clinics)•Nonprofit jobs continued to grow in the last decade, even during recession•Why do you think nonprofit jobs are somewhat recession-proof?

Two pennies!Two pennies of every dollar of

personal income (per capita) in Mass is spent on human services◦Basic services: food pantries, homeless

shelters, heating assistance◦Family issues: domestic violence, child

abuse, juvenile protection◦Some health-related: aging, mental

health, hunger/nutrition, substance abuse, physical and developmental disabilities (group homes, etc.)

Fun facts about staffMost nonprofits have fewer than 5 staff

peopleAverage salary for an executive director

at nonprofits that have an annual budget of less than $1 million?

Average salary for a female executive director at a nonprofit with a budget of less than $500,000?

Average salary for a male executive director at a nonprofit with a budget of less than $500,000?

How are they funded?71% of revenue is from fees for

services and goods9% of revenue is government

grants (decreasing!)7% from events, dues,

investments13% of revenue is from

contributions◦83% from individual donations◦11% from private foundations◦5% from corporations

Individual contributionsAmericans give 2% of their

annual income to nonprofits. How does that strike you?

35% of those donations went to religion subsector

14% went to education

Motivations for givingPersonal connectionWanting to make an impact on

their communities or specific cause important to them

Sense of personal responsibilityThey were asked!Tax deductions

Giving guidelinesOf all funds raised by

professional tele-fundraisers, an average of 40% goes to the charity

Nonprofits HAVE to be financial transparent: anyone can see their tax returns and other financial info on the state attorney general’s website and other sites, such as Guidestar

Funding trendsThe trend is for nonprofits to build

collaborations and partnerships within the nonprofit sector and cross sectors. Two or more organizations often apply for a grant together.

Many donors (and even foundations!) are reluctant to give money that goes toward overhead (aka staff) and instread restrict their gift for a specific aspect of a program or service.◦ Nonprofits have increasing difficulty paying their

staffs, especially at staff-intensive services like hotlines

For next sessionLook deeply at some organizations:

◦What needs does the nonprofit meet◦Structure of the staff◦Who is on the board◦What do their budget and financials

look like (find 990s on Guidestar)◦Use these sites: Guidestar, Charity

Navigator, idealist, taxexempt.com, Mass Attorney General’s Nonprofits & Charities Division , nonprofitdata.com