Monthly Archives: June 2011

Mid-South nonprofits and the economy: a special request

If you are a nonprofit executive in the Mid-South, we hope you received a link to a very important survey the Alliance is now conducting.

Data from this survey will be used to develop the Alliance’s third annual report on the impact of the economy on Mid-South nonprofits.

If you are the Executive Director of your organization and have not yet completed the survey, please consider spending the time to do so. This is the only study of its kind in the Mid-South, providing funders, public officials, researchers, and nonprofit support organizations with essential information about how local nonprofits are faring in the current economy.

The recession that began in 2007 has had severe and lasting effects on local nonprofits. Not only did all major funding streams decline, but needs for nonprofit services began to skyrocket.  In the summer of 2009, the Alliance published Downstream and in Demand, the  first study of the impact of the recession on the local nonprofit sector. The report provided a comprehensive look at the extent of the financial impact on local organizations, as well as the strategies emerging to survive the crisis and the most important areas of risk and need. In 2010, we conducted another study to determine what had changed, updating this snapshot of the sector as it struggled with continued revenue losses and growing demands, as well as to uncover emerging strategies for sustainability.

In 2010, we found that although some organizations were faring better, others were not. Some that felt fairly protected from the first wave of the recession were beginning to see their earned income fall off or their multi-year grants not renewed. Still others were experiencing the longer-term effects on their constituents, such as those who stopped receiving unemployment or health benefits. In 2010, many nonprofits began making decisions and implementing changes—in programs, staffing, business models, fundraising–to weather the storm.

Since the beginning of the recession, nonprofit experts across the country have devoted significant attention to understanding how nonprofits have been affected. Recent analysis has focused on the expectation that Federal budget cuts, along with state and local budget crises, will fuel a third wave of struggles for nonprofits, and one that may last at least another decade. Earlier hopes that the second decade of the 21st century would be one of significant Federal investment in nonprofit partnerships have largely been quashed. Other observers have pointed out that the purported reversal of the decline in private funding has not extended to less wealthy, less well-connected institutions, those operating on the slimmest margins to deliver the most basic human services.

So if we already know what’s happened and what to expect, why survey local nonprofits?

1. To identify trends in the Mid-South nonprofit microclimate — our unique community needs, organizations, and philanthropic  resources.
2. To better understand the structural factors challenging the health of the local nonprofit sector.
3. To identify how local nonprofits are adapting to the current environment and creating impact even with limited resources.
4. To build common ground and a stronger voice as a sector that employs and serves hundreds of thousands of people in the Mid-South.
5. To communicate essential information about our role and needs to funders, public officials, and others that can help provide resources and strategies to support the sector.

If you are a nonprofit ED or CEO and have not yet taken the survey, please follow this link and do so today. We request that only one person per organization (the ED/CEO or designated financial officer) complete the survey. Your participation in this survey reflects a deep commitment to our community and the essential role of nonprofits in the Mid-South. You can learn more about this research by visiting our 2010 report here, and please don’t hesitate to be in touch with any questions or suggestions. Thank you!

White House rural council established

Early this month the White House announced the establishment of the first White House Rural Council.  The Council is charged with building on the Obama Administration’s rural economic strategy by developing and coordinating programs to promote rural prosperity.

The Council, under the chairmanship of Secretary of Agriculture Tom Vilsack, will make recommendations regarding investment in rural areas and coordinate Federal engagement of rural stakeholders, including agricultural organizations, small businesses, and local and state governments.

The Council is expected to focus on the following key factors and strategies for rural growth:

  • Jobs: Improve job training and workforce development in rural America
  • Agriculture: Expand markets for agriculture, including regional food systems and exports
  • Access to Credit: Increase opportunity by expanding access to capital in rural communities and fostering local investment
  • Innovation: Promote the expansion of biofuels production capacity and community based renewable energy projects
  • Networks: Develop high-growth regional economies by capitalizing on inherent regional strengths
  • Health Care: Improve access to quality health care through expansion of health technology systems
  • Education: Increase post-secondary enrollment rates and completion for rural students
  • Broadband: Support the President’s plan to increase broadband opportunities in rural America
  • Infrastructure: Coordinate investment in critical infrastructure
  • Ecosystem markets: Expanding opportunities for conservation, outdoor opportunities and economic growth on working lands and public lands

Although not explicitly addressed in the White House statement, several experts have pointed out that the formation of the Council coincides with current discussions to move rural housing programs out of the USDA into HUD. HUD is one of 23 agencies comprising the Council. The House Financial Services Subcommittee on Insurance, Housing and Community Opportunity is considering the shift, although some rural housing advocates have expressed concern about HUD’s capacity and expertise for managing rural housing issues.

The Executive Order does not mention objectives related to increasing rural philanthropic resources. Recently an idea for Federal subsidization of rural community foundation endowment building started developing among the Council on Foundations and various Capitol Hill leaders. The concept emerged in response to the longstanding critique that national foundations have not invested in rural communities. The Rural Philanthropy Growth Act, as it’s being called, would create a public initiative to build endowments in rural communities, and involve philanthropists in public education and engagement to expand and protect rural resources.

For Rick Cohen’s analysis of how the Federal government/rural philanthropy program might play out, visit the Nonprofit Quarterly. You can read the Executive Statement (PDF) establishing the White House Rural Council here.

Alliance offers bookkeeping services

The Alliance offers full-service bookkeeping services to members at an affordable rate. But why outsource your bookkeeping?

First, it can help your organization significantly reduce operating costs. You eliminate the expense of payroll taxes, insurance, vacation and sick time, and other employee benefits. You may also save money on office space, computer equipment, and recruiting and training costs.

Second, outsourcing your bookkeeping can be the key to better internal controls and continuity in maintaining your financial records. You need the most accurate and thorough information possible to make your critical financial management decisions.

Third, it can free up time and resources to focus on program goals and operating strategies. For some nonprofits, it doesn’t make sense to develop bookkeeping as a core competency. Outsourcing can help focus your mission, improve your staff structure, and strengthen your operational model.

Fourth, it allows you to tap into the resources and expertise of seasoned bookkeepers who specialize in nonprofit accounting. Our bookkeepers have extensive experience with all sizes and types of nonprofits. We work with you to determine your needs and find the most effective arrangement for delivering and discussing financial information.

When do nonprofits outsource their bookkeeping?

Smaller organizations frequently need more bookkeeping skills than their administrative assistant can provide, yet don’t need a full-time bookkeeper.  Organizations of any size may have trouble finding the right fit for a full-time bookkeeper, or may not be able to cover the costs of an additional full-time employee. Sometimes nonprofits initiate the outsourcing relationship when there’s an extended vacancy, a staff restructure, or a bookkeeper goes on sick or maternity leave.

The Alliance began offering bookkeeping services to help the many members who told us how hard it is to find someone with the right skills to prepare invoices, generate financial statements, and analyze financial data, especially at an affordable rate. Others knew it didn’t make sense for their organizations to develop or maintain bookkeeping as an organizational competency. Still other nonprofits were outsourcing their bookkeeping but not getting the detail, the communication, or the timeliness they expected.

Outsourcing your bookkeeping is an important responsibility.  But keep in mind that you’re only farming out limited, specific tasks. You maintain all treasury and management functions under your control. If you decide to outsource bookkeeping, the CFO or other financial manager receives all the information she needs to thoroughly review and analyze financial information, including monthly reconciliations and financial statements.

Regardless of whom you contract with, you should never accept incomplete, inaccurate, or late information. Thinking of finding a new external bookkeeper? Talk to us. And if you already have a relationship with a contracted bookkeeper, review the relationship at least once a year to determine whether you should change bookkeepers or move the bookkeeping function in-house. Take all your resources into account, including the value of your time, and evaluate the information and communication you receive. Remember that consistent, accurate, timely financial reports are essential for strategic decisionmaking and knowing the financial health of your organization.