GNH Community

nonprofits,local leaders & Grt.New Haven business sharing information

The ALS Ice Bucket Challenge has introduced to the ALS board a challenge: more money that it dreamed of. Now, the board must, in accordance with its fiduciary duty of care, determine by policy or strategy, what it must do with its newfound wealth.

I believe that the Wall Street Journal did a fine job describing the choices unexpected prosperity introduces.

As far as challenges go, too much cash is a good one to have. But small organizations that land big money face a host of pitfalls, say charity watchdogs and management researchers. Those who ramp up hiring too quickly or spend the new funds without a clear strategy can risk their long-term financial health. And a rush of capital brings new stakeholders and higher scrutiny, ratcheting up expectations and putting a premium on communication and transparency. That is especially true when negative news can travel just as fast as ice-bucket challenges.

In August, Facebook FB -0.13% feeds were filled with people dumping buckets of ice water over their heads, and challenging others to do the same, or else donate to an ALS charity. Many people did both. The level of participation in the Ice Bucket Challenge has been staggering to charity watchers, not least the ALS Association itself, which didn't originate the challenge, but was the chief beneficiary of its popularity.

"It just became craziness. Good craziness, but craziness," said Barbara Newhouse, president and chief executive of the ALS Association since June, of the flood of financing. Revenues last fiscal year for the ALS Association's national office and its 38 affiliated chapters around the country were $64 million, far less than this summer's haul.

Such a large influx of cash can easily overwhelm an organization, said Ken Berger, president and CEO of Charity Navigator, which rates charities on their financial health, accountability and transparency. The jump in wealth often casts a brighter spotlight on the organization and tests the experience of the management, he said.

It can also bring conflicting opinions about how to spend it. Poetry Magazine in 2002 received some $200 million from an heiress to the Eli Lilly pharmaceutical fortune. At the time the literary magazine had an annual budget of less than $500,000. Several years after the gift, the Poetry Foundation, which was set up to help manage the donation, faced board discord over the future of the organization, such as investment in a new website, with several trustees resigning.

Today the foundation has an annual operating budget of more than $9 million and the group's $21.5 million new headquarters opened in Chicago in 2011. Caren Skoulas, its chief financial officer, said that the group's board and staff have been committed to using the gift to bringing poetry to a wide audience, including a website that now reaches 36 million visitors a year.

Management experts recommend taking time to create a strategic plan before rushing into spending or hiring, especially for groups that don't face the urgent time clock of a disaster-relief charity.

The ALS Association's goal is to spend the money carefully, not just quickly. "The possibility of spending $100 million by end of January [the firm's end of fiscal year] is slim to none," said Carrie Munk, the group's chief communications and marketing officer.

Because the annual budget, which includes staffing, requires approval from the group's 23-member board, the ALS Association has relied on a handful of temps and a crew of volunteers from a senior center to help handle call volume and donations. Some of the nonprofit's 54 staffers have been pulling 14-hour days and working on weekends, according to Ms. Munk and Ms. Newhouse, who count themselves among those ranks.

Even before the Ice Bucket Challenge went viral, the association's board had planned to meet in Denver in October to plan for next fiscal year. But given the extra work the group now faces allocating the funds, it set up an extra teleconference on Monday to get a head start formulating a plan. Out of last year's budget, 32% went to education and public policy, 28% to research, 19% to patient services and 21% to fundraising and administration, a breakdown lauded by charity watchdog groups.

Meanwhile, it is important to let donors know what's going on, said Thad Calabrese, assistant professor of public and nonprofit financial management at New York University's Robert F. Wagner Graduate School of Public Service. Press releases and direct outreach will help maintain ties with contributors and spur them to keep giving, he said.

Once the ice-bucket effort started picking up steam, the group very quickly created an ice-bucket information site on its main website, with lots of details and press releases. It also deployed its social-media manager to help defuse false information about its operations on Facebook and other sites, since there were various rumors circulating around about the group's operations.

Many donors were outraged after the Sept. 11 attacks, when the American Red Cross received over a billion dollars in donations for immediate disaster relief but diverted some funds for future reserves and other operational needs.

A Red Cross representative said all of the 9/11 funds have been spent, including $700 million in the first year, and provided relief to more than 59,000 families. The group now is rated highly by Charity Navigator on "accountability and transparency."

Lessons to be remembered if your nonprofit board is so challenged.

Views: 11


You need to be a member of GNH Community to add comments!

Join GNH Community

Welcome (Bienvenido, Benvenuto, Powitanie, Bonjour! Willkomme,歡迎, ברוךהבא أهلا وسهلا, Bonvenon) to GNH Community. Traducción de esta página

Imagine. Inform. Invest. Inspire.

Working together to build a stronger community - now and forever



Neighborhoods: What is Working

Open Street Project

An Open Streets Family Reunion: Reflections from the 2018 Open Streets Summit

By Ryan O’Connor, Director of Programs, 8 80 Cities Recently 8 80 Cities wrote a blog post about open streets being a labour of love. That being the case, the 2018 Open Streets Summit in New Orleans felt like a family reunion of sorts. It was rejuvenating to see old and new friends who share our passion for open streets and are working tirelessly to create healthier, happier, and more connected communities across the world. The event, which took place on September 15-16, brought together more than 50 leaders who currently organize open streets programs or are interested in bringing the...

The post An Open Streets Family Reunion: Reflections from the 2018 Open Streets Summit appeared first on Open Streets Project.

Open Streets Summit Draft Agenda

We hope you are getting ready and feel excited about the Open Streets Summit in Gretna/New Orleans! Taking place from September 15-16, 2018, the Summit will feature tours, presentations and networking opportunities with open streets champions and organizers from across the continent. Attendees will learn about the nuts and bolts of starting or scaling up open streets programs, including: Route design and planning Partnerships with business and officials Social inclusion Safety and logistics Marketing and promotion Program evaluation through measurable goals and metrics If you haven’t done it yet, click here to register for the Open Streets Summit only or...

The post Open Streets Summit Draft Agenda appeared first on Open Streets Project.

Open Streets Summit Speakers Announced!

The Open Streets Project is proud to announce that Ed Solis from Viva Calle (San Jose, CA), Romel Pascual from CicLAvia (Los Angeles, CA), Jaymie Santiago and Charles Brown from New Brunswick Ciclovia will join us as speakers for the 2018 Open Streets Summit in New Orleans and Gretna! Taking place from September 15-16 2018, the Summit will feature: Behind the scenes tour of the City of Gretna’s inaugural open streets program. Workshops, presentations, and networking opportunities with open streets champions and organizers from across the continent. Training and inspiration for both -novice and experienced- open streets organizers and supporters...

The post Open Streets Summit Speakers Announced! appeared first on Open Streets Project.

Local Initiatives Support Corporation

Financial Opportunity Centers: Flexibility in the Face of a Pandemic

The people who run LISC’s Financial Opportunity Centers across the country are a class of essential workers who have had to think creatively and act quickly to help clients who are among those hardest hit by the brutal economic fallout of Covid-19. This is how they’ve adapted to make sure their services are reaching those who need them.

$15 Million from Wells Fargo Will Ramp up LISC-Kiva Support for Vulnerable Small Businesses

Wells Fargo is granting $15 million to LISC to support small businesses reeling in the wake of the economic fallout from Covid. LISC will use the funds in a partnership with Kiva, the crowd-funding social impact platform, to get grants and low-cost loans to more than 2,800 entrepreneurs in urban and rural markets nationwide. The capital will be targeted at preventing further loss in revenue, sustaining employment and averting vacancies among vulnerable small business owners.

Can Bold Federal Action Head Off a Covid-19 Housing Disaster?

The United States has never seen the scale of potential housing displacement that families are facing right now. The country needs an immediate, unprecedented federal housing relief plan—with rental assistance, foreclosure protection and housing aid to state/local governments—to keep families in their homes and protect communities from deep and lasting economic scars.

© 2020   Created by Lee Cruz.   Powered by

Badges  |  Report an Issue  |  Terms of Service