Issue 43
December 14, 2005

Please Note: The offices of NEW will be closed Friday, December 23 and the week of December 26 — to reopen Tuesday, January 3, 2006. We look forward to serving you in the NEW Year!

NEWSNOTES is a monthly email newsletter published by NEW. It includes items of interest to the nonprofit community in Washtenaw County and the surrounding areas, as well as resources available at NEW. NEWSNOTES is proud to celebrate its fourth year of publication, with delivery to over 540 subscribers every month! We welcome your feedback and suggestions!

NEW would like to recognize the generous support of its Community Partners:

IN THIS ISSUE

LEAD STORY

Risk Management: Sustaining Nonprofits During Economic Downturns

by George L. Head, Ph.D.*

As economic downturns reduce household incomes and lower investors’ and consumers’ confidence in the economy, nonprofits face especially troubling times. On one hand, most nonprofits’ incomes fall: private contributions decline as individual, corporate, and foundation donors are less inclined to give; governmental funding declines or disappears; and earnings from endowments shrink along with their capital market values. On the other hand, economic downturns put added demands on nonprofits’ already dwindling resources: more clients ask for increased help; fewer volunteers, concerned about their own household incomes, willingly give their time to nonprofit service; and budgets for many routine activities—such as public outreach and maintenance of buildings and vehicles—are cut so that every possible dollar can be channeled more directly into client services. Squeezed between rising demands and falling resources, nonprofits become unusually vulnerable to two major classes of surprising, unexpected events.

The first class encompasses threats of unanticipated losses. These can be either from accidents (such as fires, floods, lawsuits, staff injuries or resignations and adverse publicity), or from unfavorable economic or regulatory events (such as tightened regulations, or the launching of a new nonprofit that invades the client, donor and territorial bases of another).

The second class encompasses unexpected opportunities for gain, which often bring new uncertainties into a nonprofit’s future. For example, an economic downturn may bring to a nonprofit’s door a very talented, motivated, college-graduating job applicant who in more prosperous times might have channeled his or her career into the generally more lucrative private sector. To reach its full potential, a nonprofit must be prepared to grasp opportunities whenever they arise, whether from sudden changes in the nonprofit’s outside world or from innovations that originate within the nonprofit.

Risk management deals with both countering threats and seizing opportunities. It works to reduce the variability of both positive and negative risks so that their outcomes can be more accurately anticipated, their financial consequences better budgeted, and each nonprofit’s future made more certain. Hard economic times make good risk management especially important to a nonprofit’s short-term survival and ongoing mission fulfillment.

Consider the four broad categories of resources that are crucial to mission fulfillment for any nonprofit: its people, its property, its income, and its reputation. Each presents special risk management challenges.

During economic downturns, nonprofits tend to lose staff, particularly as organizations reduce their payrolls in response to funding losses. Those employees and volunteers who remain with a nonprofit are placed under greater stress due to increased responsibilities and longer hours. On the positive side, a nonprofit may seize the opportunity to streamline functions, cross train long-term employees or combine functional areas to better serve clients.

Nonprofits’ incomes from virtually all sources are clearly threatened by economic downturns. Nonprofits looking for opportunity might increase their incomes above normal levels by broadening the client base to embrace people newly distressed, appealing to new groups of contributors, or marketing new types of goods or services. When prosperity inevitably returns, these changes can be important new sources of significant income for a nonprofit that proved itself innovative in difficult times.

Recessions threaten nonprofits’ property as aging buildings and equipment are less adequately maintained or replaced. Simultaneously, some nonprofits will find the opportunity to expand their property holdings. Equipment which was previously unaffordable may become available at distressed prices, as may real estate that its owners must sell to meet their own debts. In depressed times, some people may be increasingly willing to bequeath property to a deserving and stable nonprofit.

During economic downturns, a nonprofit’s conduct may come under especially close scrutiny as the overworked staff make errors that attract negative public attention or as disgruntled clients seek a public forum for imagined or exaggerated wrongs. Allegations of fraud or inappropriate conduct by senior management may be especially damaging to a nonprofit’s long-term reputation when it is pressured due to economic conditions. On the positive side, a nonprofit can greatly enhance its reputation by being of special public service to others who are in economic trouble or by being upfront about the challenges it faces.

In hard times, it is easy to find and bemoan the threats. It is more rewarding, however, to seek out and seize the opportunities. In all of these circumstances, the discipline of risk management can provide resources and tools for sustaining a nonprofit and the clients and communities it serves.

*This abbreviated version is reprinted with permission from the Nonprofit Risk Management Center. See the complete article.

Additional resources:

• See ResourceConnect for web and print resources on risk management, as well as service providers.
• Use the Nonprofit Computer Assisted Risk Evaluation System (Nonprofit CARES) online at the Nonprofit Risk Management Center. The Borders Group Nonprofit Resource Library at NEW has a copy on CD-Rom that you may borrow.
• Subscribe to Nonprofit Risk Management Center’s e-newsletter.
  

FEATURED ITEMS

Education: Many Learning Opportunities Available

As the fall 2005 workshop term draws to a close, NEW offers a big round of applause and enthusiastic thank yous to the 50 volunteer faculty members who served as panelists, instructors, and facilitators at our events and workshops this fall. We would not be able to offer outstanding training for nonprofits without the contributions of these dedicated volunteers.

We are finalizing a strong line-up of workshops for the spring 2006 term as well as a special event including a noteworthy speaker or two. The workshop catalog will be online and in the mail by mid-January; the first workshop is scheduled for February 24.

In the meantime, here’s a sampling of other learning opportunities can help exercise that gray matter.

• NPower Michigan offers training on all software programs you are likely to need. Their new schedule of classes should be posted soon, but they can also arrange a group or individual training session.
• Michigan Nonprofit Association’s (MNA) website lists trainings available throughout the state.
• MNA is sponsoring classes from the Indiana University Fund Raising School. Building the Annual Fund, will be held January 11 and 12, 8:30 am - 5:00 pm daily in Dearborn. The registration deadline is December 30, 2005.
• The Borders Group Nonprofit Resource Library offers resources to help you brush up on topics over the holiday break. Visit by December 22 to check out titles to read. The library will be closed December 23 through January 2.
• The Learning Institute for Nonprofit Organizations has extended the Group Study enrollment deadline to December 20. The Learning Institute's online curriculum is ideal for you if you would like to enhance your resume, need CEU credits, or wish to advance your career in the nonprofit sector. Each class is available for 30 days and requires 6 to 8 hours to complete. Learn more.
• The Center for Empowerment and Economic Development (CEED) in Ann Arbor is offering Business Planning: A Blueprint for Success on Monday evenings in January.
• Managing Legal Risks in a Nonprofit Organization, is a webinar offered by the Nonprofit Risk Management Center on January 4. Invite as many staff to participate as can comfortably view a single computer screen, and receive an hour of content with continuous live chat for just $49.
• Time and Effort Reporting for Federal Grants: A Guide to Careful Documentation is a 90-minute audio conference being held on January 5. Thompson Interactive will award 1.5 CPE credits upon completion of the conference and its post-conference survey.
  

BoardConnect: Developing Leadership, Strengthening Nonprofits

Whether you are a nonprofit seeking to enhance your board or a professional looking to get involved in the community, let BoardConnect be your “matchmaker.” BoardConnect produces trained, knowledgeable, and dedicated board candidates and connects them to nonprofit organizations seeking to strengthen their leadership capacity. This is accomplished by educating prospective candidates in the responsibilities of board service and training nonprofits on effective recruitment practices. BoardConnect then links these two parties using boardnetUSA, a national online database.

Nonprofits and community members in Washtenaw, Wayne, Oakland and Macomb counties are encouraged to participate in BoardConnect. To get started, please attend one of our upcoming trainings:

For nonprofits, "Building Your Board" covers important aspects of recruiting new members for a nonprofit’s board of directors, including recruitment planning, identifying and cultivating candidates and electing new members. Upcoming trainings are scheduled for January 19 and February 13, both in Ann Arbor.

For candidates, "Serving on a Nonprofit Board" addresses the roles and responsibilities of a board member, including board operations, strategic planning, resource development, oversight and ambassadorship. Upcoming training dates include January 10 in Detroit and February 16 in Ann Arbor.

To register for a BoardConnect training, or for more information, please visit www.boardconnect.org. You may also contact Andrew Steck or Emily Modak at NEW (734-998-0160).

Ann Arbor Area Community Foundation - Information Session

Wednesday, January 11, 9 a.m. – 10 a.m.
NEW Center, 1100 N. Main St., Ann Arbor
Free

All nonprofits in the Ann Arbor Area Community Foundation’s geographic boundaries are invited to an information session that will cover changes to the Community Foundation’s grant process. Take advantage of this unique offering to get an overview of the new policies and have your questions answered.

News from Community Grants

Major funders in Washtenaw County partnered a year ago to offer an online grant application process, CommunityGrants.org, that allows for a single application process for multiple requests.

The James A. and Faith Knight Foundation has set a deadline of January 10 for submitting grant proposals. Washtenaw County applicants to the Knight Foundation are expected to use the online application system at www.communitygrants.org. Training will be available to Knight Foundation applicants who have not previously used the online application system.

All Washtenaw/Ann Arbor Community Development grant recipients are to have reports submitted by January 14. Training will be offered on how to complete the reports using the online system.

Ann Arbor Area Community Foundation’s deadline for the General Grant Program is February 8. Applicants must contact Martha Bloom (734-663-2173) before submitting an application. Training will be available to applicants who have not previously used the online application system, as well as those who simply need a refresher course.

Pfizer’s Community Grants cycle, which occurs once a year, requires that applications be submitted by March 15. This cycle will cover activities from September 2006 to December 2007. Training on the online application process is encouraged.

Questions on training seminars? Contact Rebecca Domegan (734-998-0160 x201).

Volunteer Recognition

During National Volunteer Week (April 16 - April 22, 2006), United Way for Southeastern Michigan (UWSEM) will join other organizations across the country in recognizing outstanding volunteers who enrich the lives of others in their communities.

This year’s award luncheon on Tuesday, April 18, 2006 in Detroit is billed as one of the largest volunteer recognition events in the nation. Take the time to nominate someone who has made a difference to your community or program. Nominations are due January 20. Find more information and forms online.

Questions? Contact Angela Walker (313-226-9450).

Input Requested on Statewide E-grant Portal

The state of Michigan has a goal to eventually have all state grants online; allowing individuals to search, find, apply and report online. The Department of Information Technology (DIT) would like to receive feedback from current and future grantees on the beginning stages of the search and find portion of the portal. One session will be held on January 5 at YouthVille Detroit from 10 a.m. to noon. Another will be held January 6, 10 a.m. to noon at the Michigan Nonprofit Association offices in Lansing. For those unable to travel to either location, a conference call will be offered on January 5 from 3 p.m. to 5 p.m.

Please RSVP to Arlyn King (517-492-2400) by December 23.

Postal Rate Hike

Nonprofit organizations will pay an additional 3 percent on nonprofit standard rates for mailings as of January 8. This is lower than the U.S. Postal Service first proposed, but we should be prepared for an even larger rate increase in 2007. A spokesperson for the Postal Service suggested these strategies to help reduce costs: evaluate dimensions of your mailing pieces; eliminate unnecessary components; lighten the load (print on lighter paper); and lessen the load (consolidate your shipping). Learn more from the Alliance for Nonprofit Mailers.

Reminders

DTE Awards for Nonprofit Excellence: Deadline for applications: January 31.

Junior League Flexifund grants proposals are due January 15.

REGULAR FEATURES

Nonprofit Bulletin Board

Visit NEW's Nonprofit Bulletin Board to post and view notices about free resources, fundraising opportunities, and other items relevant to the southeast Michigan nonprofit community.

Events Calendar

Ann Arbor Area Convention and Visitors Bureau calendar of events. E-mail Nick Miller to request a password to submit an event.