Best of the Nonprofit Law Blog 2016

Here are some selected highlights from NEO Law Group over the past year that we hope you’ll find helpful.

Blog Posts


10 Legal Tips in 30 Minutes to Get 2017 Ready

New IRS Notification Requirement for 501(c)(4) Organizations – Form 8976

Nonprofit Corporation Legal Audit

Nonprofit Compensation: Tips on Using Comparability Data

Starting a Nonprofit

Starting a Nonprofit: Form 1023 or Form 1023-EZ?

How to Start a 501(c)(4) California Nonprofit Step by Step

501(c)(3) Purposes & Activities

Environmental as a 501(c)(3) Charitable Purpose

Economic Development as a 501(c)(3) Activity

Lobbying Activities

The Power of Nonprofit Advocacy: Best Lobbying Resource Ever!

Lobbying & Grants to Non-501(c)(3) Entities: Know The Rules

Political Activities

501(c)(3) Electioneering Rules: Voter Guides & Candidate Questionnaires

501(c)(3) Electioneering Rules: Candidate Appearances & Debates

Employee Endorsements & Election Activities

The Electioneering Prohibition: A Closer Look

Private Foundations & Donor-Advised Funds

F. D’Up Family Foundation

Program-Related Investments

Donor-Advised Funds: What You Should Know


20th Annual Western Conference on Tax-Exempt Organizations

New Frontiers: 2016 Independent Sector Annual Conference


2016 ABA Business Law Section Annual Meeting

5 Highlights from the ABA Exempt Organizations Committee Meeting 1/29/16


California’s Dangerous Nonprofit Warning Label Bill – AB 2855 – Will Not Advance

Foreign Corporations and the Application of California Nonprofit Laws

Commercial Fundraiser – A Revised Definition


Crowdfunding Rap

Featured Small Firm: San Francisco Daily Journal

Attorney/Director: Issues for Attorneys Serving on Nonprofit Boards

10 Predictions for the Nonprofit Sector in 2016 and Beyond


SOCAP16 and the Continued Evolution of Impact Investing, The Nonprofit Quarterly

Churches & Political Activity: The Call to Repeal the Johnson Amendment, The Nonprofit Quarterly

Understanding ‎Crowdfunding after a Tragedy, The Nonprofit Quarterly

Think Tanks Need a Certification Program to Establish Transparency, The New York Times

Program-Related Investments: Will New Regulations Result in Greater and Better Use? The Nonprofit Quarterly

The Ongoing Overhead Myth and the Dangers of Overly Zealous State Legislators, The Nonprofit Quarterly

The Deposed “King” of Queens Library: The Legacy of Bad Nonprofit Leadership, The Nonprofit Quarterly

Fiscal Sponsorship: A Balanced Overview, The Nonprofit Quarterly


NEO’s Erin Bradrick became a monthly columnist for The Daily Journal, California’s largest legal news provider!

Nonprofit Radio

Unpaid Interns

Election Year Advocacy

Overhead and Wounded Warrior Project

PATH Act (IRA Charitable Rollover)

Speaking Engagements

Nonprofit Crowdfunding, Western Conference on Tax-Exempt Organizations

Hot Topics to Keep Nonprofits Out of Hot Water, CalNonprofits Annual Convention

Complexities of Starting a Nonprofit in California, Lorman (Live Webinar)

Winding Down/Gearing Up: 10 Legal Tips to Get 2017 Ready, Foundation Center (Livestream)

Duties and Responsibilities of Serving on a Nonprofit Board, Bar Association of San Francisco

Representing Nonprofits: Traps and Tips

Hand and MouseptrapRepresenting nonprofit organizations can be incredibly rewarding but challenging on many levels. Last month, Gene shared the tips and traps of representing tax-exempt organizations regarding corporate, tax, and other issues in a podcast hosted by West LegalEdCenter.  Here is a summary of his many enlightening and constructive points:


  1. Failing to inform the client at the outset of representation that you represent the organization and not any individual directors or officers.
  2. Assisting a client in starting a nonprofit that lacks a plan for viability and has not been sufficiently researched, without discussing potentially more advantageous alternatives like fiscal sponsorship.
  3. Drafting a very specific and restrictive purpose statement that can create problems should the organization’s mission evolve, particularly if the board neglects to amend its governing documents and/or fails to use past-acquired assets for the original purpose for which they were raised.
  4. Including “non-voting directors” in the organization’s bylaws (under most states’ laws, there is no such thing as a “non-voting director” and, subject to very limited exceptions, each director has the right to vote on all matters before the board).
  5. Providing in the bylaws that the board of directors may combine in-person votes at a meeting with email votes to take board actions.
  6. Reinforcing the myth that nonprofits should always minimize overhead expenses (even at the expense of building an appropriate foundation on which to build the organization’s operations).
  7. Failing to inform the client about the differences among volunteers, independent contractors, and employees, and the risks of misapplying these classifications.
  8. Advising the founder to elect a board of directors that shares the founder’s vision for the organization without emphasizing the benefits of a board with diversity in both background and skill, and the need to elect only directors who are prepared to meet their fiduciary duties of care and loyalty.
  9. Ensuring that the client understands “nonprofit” does not mean tax-exempt, and receiving a determination of tax-exemption from the IRS does not necessarily mean the organization is also tax-exempt for state tax purposes.
  10. Failing to discuss with the client the benefits of having organizational policies that address the legal and management implications of conflicts of interest, proper gift receipts, misuse of social media, expense reimbursements, acceptance of noncash gifts, document retention/destruction, and whistleblowers.

Tips:helpful tips

  1. Consider providing important advice in writing to help assure the legal advice is not miscommunicated to the board and/or other decision-makers.
  2. Suggest, when appropriate, alternatives to starting a nonprofit such as working with an existing organization, fiscal sponsorship, or a donor-advised fund.
  3. Encourage the organization to carefully consider all the pros and cons before deciding whether to adopt a voting membership structure, especially if the organization is small.
  4. Review the governing documents to make sure the written consent provision, if any, complies with applicable state law (e.g., in California, unanimous written consent is required, and a written consent signed by a majority of directors would not be sufficient).
  5. Recommend, where appropriate (which will be in most cases for all but the biggest public charities), that the organization make the 501(h) lobbying election, which will generally allow the organization to spend more on lobbying within defined and generous limits, simplify recording keeping, and worry less about losing its tax-exempt status due to lobbying activities.
  6. Emphasize that the client must understand who the organization’s directors are, when and how they must be elected, and what their duties and roles are.
  7. Recommend, where appropriate, that the client invest in prudent overhead expenses (e.g., organizational policy creation, risk management, and technology).
  8. Advise the organization to create an orientation process for new directors so they are more fully informed of the organization’s policies and structure, and importantly, their legal responsibilities and fiduciary duties.
  9. Inform directors that under certain circumstances (e.g., excess benefit transactions, unpaid payroll taxes) they may be held personally liable for their actions and/or failures to act, and that state and federal volunteer protection laws may not shield them from a lawsuit.
  10. Encourage the organization to contact an insurance agent, broker or company that has experience working with nonprofits in order to obtain appropriate insurance protection for organization and its directors and officers.


Nonprofit Law on Facebook



We started posting daily to our Facebook Nonprofit Law page in March 2013 and just reached 2,000 likes. Check out our mix of articles and posts of relevance to nonprofits here. From the last seven days:

8/27 - Sector-Switching: Two Groups Make the Change From For-profit to Nonprofit (Nonprofit Quarterly)

We'll definitely be seeing more for-profit to nonprofit conversions in the future. What do you think? If you're thinking about this switch, get legal guidance. It's complicated and in some important ways irreversible.

8/27 - 'Strategic Philanthropy’ Shifts Too Much Power to Donors (Chronicle of Philanthropy)

The latest opinion in The Chronicle of Philanthropy getting a lot of buzz. Is it wise for a few members of insular foundation boards to instruct nonprofit grantees on how to best advance their missions? Merits on both sides of this discussion.

8/26 - Atheists Can Sue IRS Over Failure To Enforce Limits On Churches' Political Speech (HuffPost Politics)

More on churches and electioneering.

8/25 - Jesus Voted against Your Sins: A Christian commission wants ministers to be able to endorse candidates and keep their tax-exempt status. ( The American Prospect)

Interesting article about churches and political activities. What do you think of the author's suggestion of a simple fix: "Religious leaders who want the liberty to endorse candidates can give up their churches’ tax deduction." Not discussed is the substantial social services provided or funded by churches. Lots to think about …

8/24 - IRS Kills Tax Exemption Of Foundation Pushing Eternal Life (Forbes): Where is My Exemption Application? (IRS)

The Washington Bureau Chief of Forbes alerted me to this informative article re: revocation of tax-exempt status for commerciality and private benefit. Good follow-up to Erin's last post on the Nonprofit Law Blog

8/23 - Unrelated Business Income and the Commerciality Doctrine (Nonprofit Law Blog)

Important issues for nonprofits with earned income activities. What makes activities related to their 501(c)(3) purpose unrelated because of the commercial manner in which they are conducted? – Erin Bradrick

8/22 – Nonprofit Tweets of the Week (Nonprofit Law Blog)

More on the IRS controversy, charitable deduction, political activities, measuring impact … Read on!

8/21 - IRS 'Scandal' Fades As Documents Show Scrutiny Of Democratic Groups, ACORN Successors (HuffPost Politics)

Are we done with this?

The Legal Guide For Association Board Members

Last week, I had the pleasure of having lunch with association attorney Jim Seely after reading the recently published second edition of his book: The Legal Guide for Association Board Members.  The Guide was designed for corporate directors of 501(c)(6) trade associations and business societies but holds important lessons for all board members of nonprofits.

The Guide consists of four principal sections:  (1) The Association's Legal Structure, (2) Association Liability for Programs and Activities, (3) Legal Concerns for a New Era, and (4) The Board Member's Legal Liability.  Here are some of the important takeaways:

  • Antitrust laws apply to associations with exceptional force.  An entire chapter is devoted to issues such as price fixing, boycotts, membership exclusion, members discipline, codes of ethics, services to nonmembers, and certification and credential programs.
  • Associations must draft contracts and agreements that will meet the organization's precise needs.  Seely focuses on three common types of contracts:  group hotel contracts, computer contracts, and endorsements (see Seely's guest post on the Nonprofit Law Blog describing repercussions from a poor endorsement agreement).
  • The most important risk management device for board members is education.  The Guide recommends directors' manuals (containing pertinent legal documents like the articles and bylaws) supplemented by legal workshops and legal opinion letters.
  • Board members should pay special attention to the function and structure of committees.  Delegation of authority must be made with due care, reasonable limits, and adequate oversight.  The Guide describes the Hydrolevel case, a U.S. Supreme Court decision that held an association liable for the acts of one of its committees.
  • Ensure that the association's CEO has ample authority to use the services of legal counsel whenever the CEO determines it is in the best interests of the association to do so.  This is a management function, and a board does not want to handcuff the executive from taking timely proactive and defensive measures to "head off or minimize liability to the association."
  • The ability of members to generate public content [on Association-owned listservs and social networking sites] that has not been examined by association staff creates a fertile environment for potential liability.  The following actions, among others, are detailed:  asserting the association's ownership of the listserv or site, establishing and enforcing appropriate rules of use, and reminding users that their messages will be widely published and could subject a user as well as the association to liability.
  • When a board member assumes office, he must conform his conduct to certain legal standards and must be aware of the legal obligations attached to the position.  Seely discusses the applicable standard of care and issues such as conflicts of interest, Sarbanes-Oxley, the redesigned Form 990, and the dangers of acting outside the scope of one's authority.
  • There are ways that associations can help their board members avoid personal liability.  The Guide recommends five particular methods:
    1. meaningful position descriptions,
    2. legal workshops,
    3. indemnity and insurance,
    4. written legal opinions, and
    5. annual legal reports.

Legal Guide for Associations

During lunch, I posed three questions to Seely, and he provided me with the following answers:


Waiting for ‘Superman’

Davis Guggenheim, director of An Inconvenient Truth, addresses another thought-provoking topic—American public education reform—in his recent documentary, Waiting for ‘Superman’. Waiting for ‘Superman’ follows the stories of five young children who despite entering different grades, being of different backgrounds and attending different public schools throughout the country, all find themselves in the same situation: hoping to gain entry into a high performing charter school in their areas through a random and competitive lottery system.

Teachers unions are also a key character in this film. Among other topics, Guggenheim touches upon two widely discussed issues: first, the statistics showing that teachers unions accounted for some of the largest monetary contributions in the 2007-08 political campaigns; second, the vote holdout by an American Federation of Teachers (AFT) local chapter, Washington Teachers Union (WTU), on a new salary plan proposed by D.C. Schools Chancellor Michelle Rhee to give teachers up to double their salary—up to $140,000—on a merit based system in exchange for giving up their tenure.

To understand how these types of events operate within nonprofit law, we should first lay out some basics about unions. Labor organizations are nonprofit, tax-exempt entities. In California, they are governed by a section in the Nonprofit Corporation Law dedicated to “Nonprofit Mutual Benefit Corporations.” Under federal law, organizations such as the AFT can be recognized as 501(c)(5) tax-exempt labor organizations. The general definition of a labor organization is:

  • An association of workers
  • Who have combined to protect or promote the interests of the members
  • By bargaining collectively with their employers
  • To secure better working conditions, wages, and similar benefits.

(IRS 2003 EO CPE Text).  In other words, they are exempt entities because they have the primary purpose of representing their members in matters as wages, hours of labor, working conditions and economic benefits. (See, e.g., Rev. Rul. 67-7, 1967-1 C.B. 137; Rev. Rul. 62-17, 1962-1 C.B. 87).

Political campaign contributions made by labor organizations such as teachers unions implicate the federal level laws. Two national teachers unions, the National Education Association (NEA) and AFT, outspent all other unions in the 2007-08 election cycle, distributing $71.7 million on candidate and issue campaigns across the country. (See "The Long Reach of Teachers Unions" by Mike Antonucci). This substantial figure raises the often-discussed topic of nonprofits and political campaign activity. A 501(c)(5) tax-exempt organization may engage in political campaigns on behalf of or in opposition to candidates for public office provided that such activity does not constitute the organization's primary activity. (See G.C.M. 34233 (Dec. 3, 1969)). Therefore, one is left wondering what amount equates to “less than primary.” Unfortunately, there are no exact answers from the IRS and this question continues to be asked during the current midterm elections.

With respect to the vote holdout, news stories such as “Pay Dispute Continues as Classes Near" by Bill Truque of the Washington Post indicate that there was some WTU member support of Rhee’s proposed plan but WTU President, George Parker, decided to not have the union vote at that time. This raises an interesting question with respect to member rights of a teachers union as defined by state laws. For example, under the California Corporations Code section 7510(e), 5% or more of the members of a nonprofit mutual benefit corporation can call a special meeting of members for any lawful purpose. Therefore, it is conceivable that such a vote could still happen under California law despite not being called by the President of a labor organization if enough members wanted to vote on the matter and could successfully mobilize together.

Other provocative moments of the documentary included shocking statistics about American public education generally, such as:

  • America ranks only 25th in Math and 21st in Science among 30 developing countries.
  • Our nation’s capital, D.C., has the lowest eighth-grade reading proficiency in the country at 12%.
  • It is estimated that only 50 million Americans will be qualified to fill the 123 million high-paying, high-skilled jobs that will be available by 2020.
  • In Pennsylvania, the cost to support 4 years in state prison is more than it costs to support 13 years of private school (K-12) by over $20,000.
  • In New York, the disciplinary hearing process for tenured teachers takes longer than the average criminal trial.
  • More than 2,000 American high schools are “dropout factories” (meaning more than 40 percent of the students do not graduate).
  • The achievement gap between student performance above the poverty line and below the poverty line has not changed but some schools in low income areas such as Kipp Schools show the possibility of closing the gap by statistically outperforming public schools above the poverty line.

As a viewer, I appreciate that “Waiting for Superman” is helping to include more people, both critics and fans alike, into this discussion by showing at least one person’s perspective about the competing forces that many American families, teachers, and legislators attempt to navigate each year in the American public school system.

More information about “Waiting for ‘Superman’” is available at

Nonprofit Mergers & Alliances (2nd ed.)

I'm currently reading the recently published 2nd edition of Nonprofit Mergers & Alliances by Thomas A. McLaughlin and can already recommend it to nonprofit executives and board members thinking about collaborations and/or mergers.  Indeed, the book had me at "hello" or, rather, its first sentence:  "The best time to consider a merger or an alliance is before it is necessary, when coming together with another organization will mean combining strength with strength, and when the collective energies and the creativity of the two or more entities can be used proactively instead of being sapped by the demands of crisis management."  It's not that a weakened organization should not seek a merger; rather, the most benefits from a merger will result from a merger of strengths.

Nonprofit Mergers & Alliances

McLaughlin, Vice President for Consulting Services for the Nonprofit Finance Fund, discusses early in the book why nonprofit services are fragmented and how consolidation is part of a nonprofit's life cycle.  He devotes a chapter to integrated service delivery and why it will be "a central goal of the next generation of nonprofit managers."  Key to such integration is the use of information as a strategic tool and the consequent need to invest in expensive information technology.  And this will "boost the minimum economic size in virtually all fields, which in turn will put more pressure on groups to merge and find new ways of collaborating."

The book identifies four levels on which nonprofit collaborate:  Corporate, Operations, Responsibility, and Economics.  A merger is defined as a collaboration that entails change on all four levels.  An alliance is defined as a collaboration that entails change on one to three levels (not including the "Corporate" level).  

Mergers are more fully described with helpful discussions of pros and cons, myths, and common issues, including size of the board, composition of the board, and selection of officers.  McLaughlin further breaks down a merger into three phases:

  1. Feasibility Assessment.  "The objective is for planners to learn about each other's organization and to conduct some serious analyses of the major aspects of each.  The result of this stage should be an agreement to proceed – or not."
  2. Implementation Planning.  "During this stage, the participants carry out deeper analyses as necessary and formulate a plan for how to make the collaboration succeed."
  3. Integration.  "This is where the plain old day-to-day management work occurs.  Often the bulk of executing the integration plan falls on managers and staff support people who were not as intimately involved in the first two phases."

The final chapter in the book discusses "The Seven Stages of Alliance Development" and notes that "alliances are far more open-ended and inherently ambiguous than outright mergers."  McLaughlin emphasizes that "the thing that makes them even more difficult is that leadership in an alliance derives not from an assigned position or role but rather from a delicate mix of personality, organizational identity, and resources."  The seven stages of alliance development are:

  1. Initiate, explore, and analyze
  2. Synthesize and plan
  3. Establish shared objectives
  4. Develop a working committee structure
  5. Gain quick victories
  6. Institutionalize buy-in
  7. Implement and evaluate

Mergers are like marriages – they vary widely and there is no single formula or book to ensure a particular merger's success.  But Nonprofit Mergers & Alliances is a good primer (and reader-friendly, as claimed on the book jacket).  It covers a very complex area and contains many practical tips and common pitfalls.  And executives and board members of nonprofits would be wise to review a good resource on nonprofit mergers even if they should also retain a merger consultant and attorney (both highly recommended, resources permitting).

Foundations for the Common Good

Caring to Change, an independent project conducted in collaboration with the Aspen Institute's Program on Philanthropy and Social Innovation, earlier this year released Foundations for the Common Good, a report written by Mark Rosenman on how grantmaking can be more effective if focused on the broader goal of advancing the "Common Good."  Dr. Rosenman sought the input of not only established leaders in philanthropy, but also interviewed younger people, people of color, and others in philanthropy and nonprofits not normally involved in setting foundation strategy. His goal was "to uncover their criticism of grantmaking and their ideas about how foundations can be more effective at creating a better world."

The immediate question raised by the title of the report is what is the Common Good?  Are there not wide variations in what each individual thinks is best for the collective, and are there not conflicting interests of different communities?  The report provides a detailed discussion of its definition of the Common Good and states that "[i]ts most basic meaning is that the community and its institutions should serve the good of all its citizens and not just the restricted good of a particular ruler or class."  In a reference to the U.S. Constitution, Rosenman reminds us that "We the People" are not a special interest group.

The report provides examples of “common values,” those that "create and maintain the conditions necessary for on-going dialogue and debate about what constitutes the Common Good in theory and practice. Such conditions include both basic rights to survival but extend also to conditions that enable people to participate in public projects and discourse."  Rosenman cautions that "[t]hese “common values” must not be confused with the values of the majority or of a community that restricts membership and excludes some voices."

Of course, there is no consensus on the Common Good values or their application to particular situations.  But the report emphasizes that foundations must engage in discussion and consideration of their leaders' vision of the Common Good in making their grantmaking policies and decisions.  "It is this process of grounding grantmaking in the Common Good, of finding its meaning and identifying its implications for actions, that needs to guide foundations."

Common Good

"The point of identifying and discussing Common Good values should not be to privilege one set of terms or meanings over others. Instead, by talking about these values we can uncover our assumptions about what we are doing and why, openly analyze and debate those assumptions, identify ideals that can serve as points of connection and rallying cries for people from many different backgrounds, and learn from one another. Thus, it is essential to defining and decoding the Common Good that the full diversity of peoples have the right and capacity to be represented equitably with voice and power in the debate. This process then can help us avoid the repetition of ineffective patterns, inject transparency into decision-making, build common cause, and ultimately help foundations to create a better world more efficiently."

Beyond its discussion of the Common Good, the report offers working strategies to implement grantmaking with the Common Good as its unifying theme.  But Rosenman emphasizes that the strategies will have maximal impact only if "undertaken by grantmakers who consider the values that motivate them and the ways in which they plan to create a better society: through mission-specific and other efforts designed in ways to also advance the broader Common Good."

The strategies are broken into three categories:


Within each category are practical steps worthy of serious consideration by every foundation, including:

  • Define the core values that motivate your foundation's work.
  • Revisit your mission statement.  [GT – This has legal implications as well.]
  • Consider grantmaking for programs that intend to explicitly instill, reinforce, and animate Common Good values.
  • Affirm that diversity is a central concern in all program areas and for general support grants.  [GT – Rosenman's attention to diversity is important and much appreciated.]
  • Support nonprofit organizational development initiatives that address concerns of diversity and which vigorously pursue equality of opportunity/outcomes.
  • Support and design initiatives that bring together leaders of disparate organizations and provide them with the opportunity to explore commonalities and build collaboration, as well as to set their efforts in context of the Common Good.
  • Convene grantees that are potential collaborators, but don’t compel partnerships.  [GT – Again, important in a legal context too.]
  • Create systems-reform opportunities by collaborating with other foundations.  [GT – Fiscal sponsors may be an important vehicle for such collaborative efforts.]
  • Encourage all grantees to at least consider public policy.

Get the full report here.

See also "How Even Great Foundations Can Do More for the Common Good" – Dr. Rosenman's opinion piece for The Chronicle of Philanthropy (Oct. 29, 2009).

And for a broader discussion of philanthropy and the pursuit of the common good, read Civil Society, Philanthropy, and the Fate of the Commons by Bruce Sievers.

You’ve Gotta Have Heart

I recently skimmed You've Gotta Have Heart: achieving purpose beyond profit in the social
by Cass Wheeler, former CEO of the American Heart Association
(1997-2008).  Wheeler's stated goal of writing the book:  "to increase
your organization's or your operation's effectiveness by 5 percent (or
better) over your current projections."

Here are some of the many helpful takeaways, supported in the book by real-life examples:

  • A mission statement is not the same as a true sense of mission.  Nonprofit organizations must have a pervasive sense of mission.  Without a cause that resonates with volunteers and donors, nonprofits will ultimately fail and die off.
  • Good intentions are no longer enough.  Nonprofit organizations must apply some businesslike, bottom-line mentalities to maintain their credibility with increasingly skeptical and results-oriented donors.
  • Determine core values and stick to them.  Your organization's core values are your ethical standards: what is important to your organization and how you will do business.
  • Every nonprofit needs a strategic driving force.  A driving force is "the primary determinant of the products and services an organization will and will not offer the the market … it will and will not serve."
  • Know your business model and change it if necessary.  … Your business model is the process by which you acquire financial resources and how (and by whom) those resources are expended.  Be aware of how it helps or hinders you in achieving your  mission.
  • Every nonprofit needs a breakthrough goal.  It provides accountability and allows you to make difficult decisions about the allocation of limited resources.  It provides excitement among your employees, volunteer, board members, donors, and the public.
  • A bold goal is meaningless without rock-solid execution.  … When you set a breakthrough goal, you have to be willing to hold your organization's feet to the fire.
  • Shout your goal from the rooftops.
  • Marketing is not a dirty word.  As long as a nonprofit organization's marketing is effective in boosting image, driving mission, extending reach, and increasing revenue, not only is it acceptable for a nonprofit, it is essential.
  • Any marketing effort must link to your organization's mission and strategic driving force.
  • Incorporate diversity into your efforts.  Your organization must reflect the diversity of your constituents to serve them most effectively.  Look to partnerships, local networking opportunities, supplier diversity, and affinity groups to learn about best practices and ensure equal service and opportunities for all."
  • Remember to declutter.  The only way to have room for innovation is to let go of programs, activities, and products that no longer produce a return on investment.
  • You must have a people strategy.  Developing your staff is not a program to implement; it is a way of being.
  • Make deposits in people's emotional trust accounts.  Think of positive acts of leadership and management as making deposits into an emotional account with each person on your team.  The more goodwill you have in your trust account, the better positioned you are if you ever need to make a withdrawal, such as asking for a favor or forgiveness for a mistake.
  • Implement best practices with your board.
  • Advocacy and lobbying should be considered by nonprofits large and small.  We have a responsibility to speak out on issues that affect our constituents and advocate for better public policies.
  • Develop a specific and realistic strategic alliance value proposition.  This is a simple statement that defines:  (1) what you bring to the table in a partnership and (2) what your organization expects to receive from partner organizations.
  • Personal alliances drive professional alliances.

Wheeler combines strong business acumen and integrity with an appreciation of nonprofit organizational cultures.  Moreover, You've Gotta Have Heart is accessible, insightful, and widely applicable.  It's a book that I'll sit down and read more thoroughly soon.

Review: Grassroots Philanthropy: Field Notes of a Maverick Grantmaker

Grassroots Philanthropy:  Field Notes of a Maverick Grantmaker by Bill Somerville* with Fred Setterberg is a book with a clear message to foundations:  accomplish more through grassroots grantmaking.  Somerville, President and Founder of Philanthropic Ventures Foundation and former longtime Executive Director of the Peninsula Community Foundation, suggests that this can be done by following his five-point program:

  1. Locate outstanding people doing important work.
  2. Move quickly (and shred paper).
  3. Embrace risk.
  4. Focus on ideas instead of problems.
  5. Take initiative.

While these common sense ideas may not seem to be products of a maverick, their widespread implementation certainly would be revolutionary.  Somerville notes that foundations have enormous potential to transform American lives, but asks:  "Why aren’t we – the entire philanthropic sector – doing  a much better job?"

Somerville emphasizes the importance of finding and investing in outstanding leaders.  To do so, foundation executives must spend more time in the communities in which they invest and less time reviewing documents behind their desks, and foundation boards must grant greater discretion to their executive directors and staff.  The book also advocates timely grantmaking in furtherance of innovative solutions and taking calculated risks.  Hear, hear.

Grassroots Philanthropy is just the kind of short, easy-to-read book of valuable insights that an executive might pass out to each of the directors at a board meeting.  A book club-style discussion at a following meeting might be one of the most productive sessions a foundation board can have.

“Blue Avocado” Launched April 15

Jan Masaoka, former long-time Executive Director of CompassPoint Nonprofit Services, started her next big thing by launching Blue Avocado this morning.  The online magazine for people involved with nonprofits is described by Jan in a message she sent to some of us bloggers:

Blue Avocado is a new online magazine–half magazine, half blog, half website–for people working and volunteering in nonprofits.  On the 1st and 15th of every month an email newsletter will be sent to subscribers, and the newsletter is replicated on the website. At the site, however, people can comment on articles, and see archives of all previous issues.  The newsletter I’ve been writing for 10 years–the Board Café (for nonprofit board members)–has expanded its scope and upgraded its technology to Blue Avocado.  Blue Avocado will be free to subscribe and free to register (in order to post comments), and will ask for public television-like member support.

Some insider info you won’t find on the site:

  • We’re launching with 57,000 opt-in subscribers, and the first issue will be delivered 10,000 at a time over a period of six days.
  • One of our upcoming features is "Worth Reading and Why," which is where we’ll be able to promote items from your blogs or the blogs themselves. We expect to start this feature with the third issue (May 15).
  • Blue Avocado will implicitly (rather than be lecturing) promote the racial, ethnic, age and sexual orientation diversity of the sector and a belief in cultural pluralism.
  • Just as actors have "sub-texts" that are the backstory for a character, Blue Avocado has a sub-text of building the movement of community organizations for community good and social change. Community organizations are criticized by everyone these days: consultants tell them they’re doing everything wrong; government tells them they’re too small or mismanaged; donors tell them there are too many nonprofits, and foundations tell them their logic models aren’t good enough. This very large group of organizations and people–the overwhelming majority of the nonprofit sector–are actually the ones doing most of the work and coming up with the most innovative ideas and energy.  But too often they’ve gotten infected with the self esteem crisis and victim mentality that is constantly being pushed on us.

There’s a lot to like about this new site.  On my first visit, I enjoyed reading the following articles:

  • Reasons to have – and reasons not to have – an attorney on the board
  • Abolish board committees?
  • Five Ways to Let Government Money Run You Over
  • What Should We Do About an Employee’s Outrageous Blog?
  • Promises, Promises:  Rural Advocates vs. Big Philanthropy