Issue 60
June 28, 2007

NEWSNOTES is a monthly email newsletter published by NEW. It covers resources available at NEW in Ann Arbor as well as items of interest to the nonprofit community in southeastern Michigan. NEWSNOTES is proud to celebrate its sixth year of publication, with delivery to over 900 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

The New Form 990: Tough Love in Philanthropy

By Susan Raymond*

The announcement of a new and improved Internal Revenue Service tax form for nonprofits is a good thing for the nonprofit and philanthropic sectors. A really good thing.

For several years now, this author has observed that the nonprofit sector in this country exists at the pleasure of the people. It represents a social compact in which the people agree to bear the tax burden of nonprofit organizations in exchange for their commitment to dedicate themselves to problems on the societal commons which individual citizens cannot singularly address. As with any social compact, that relationship is rooted in trust. When trust erodes, so does the strength of the agreement -- in this case, the willingness of the people to continue to bear the burden. The possibility of that erosion is not trivial. In many communities, 25% or more of property is off the tax rolls due to nonprofit ownership, which means that property owners must make up the difference. Transparency can counteract distrust and prevent that erosion.

The action of the IRS comes none too soon. The nonprofit sector is no longer simply an agglomeration of “mom and pop” social efforts with citizens stuffing envelopes around Aunt Tillie’s kitchen table. Nonprofits spend nearly $800 billion annually, and account for 8.5% of national income. The nonprofit sector is the third largest contributor to the U.S. GDP, after retail and wholesale trade. One in every ten jobs is in the nonprofit sector, and nonprofits represent as much as 38% of employment in some major cities. The sector presents to the people not simply the face of local community, but, increasingly, the face of big business. Trust, in turn, faces a raised public eyebrow.

Combine sheer size with complexity and that eyebrow can rise to the public’s scalp line. Three decades ago, nonprofits received a third of their income from private voluntary contributions. Today, that has fallen to 23%. In turn, income from programs has risen to 72% of total revenue, compared to 60% three decades ago. Indeed, some sectors are no longer nonprofit at all; 83% of ambulatory health care in America is provided in proprietary organizations. Nonprofit income from unrelated business revenue has tripled in the last 15 years.

So the sector is becoming larger and more economically visible as its revenue structure evolves to reflect its business structure. Public trust -- the willingness to pay those extra taxes -- requires clarity of purpose and transparency of financial structure. The degree to which that trust is at risk is disturbingly well-documented by Anne Glauber in her essay “We the People: Public Trust and Expectations” recently published in Mapping the New World of American Philanthropy: Causes and Consequences of the Transfer of Wealth, edited by this author and Mary Beth Martin. Americans are skeptical about the honesty of nonprofits, and the older Americans get, the more skeptical they become. This slide toward distrust can (and must) be stopped with the kind of transparency that the new Form 990 requires.

True, it will take more effort on the part of nonprofits. Many nonprofits do not shy from that effort and look forward eagerly to clearer guidance from the IRS and to the ability to step forward with greater transparency. Some nonprofits, however, will think it annoying; some have already said as much. I would side with the former. To those who view these changes with annoyance or plan grudging compliance, I would respond very simply. Public trust is not owed, it is earned. Tax exemption is not simply a legal or regulatory status, it is a civic privilege. Effort is not too much to ask in exchange for privilege.

*Susan Raymond, Ph.D. is the co-author of Mapping the New World of American Philanthropy: Causes and Consequences of the Transfer of Wealth, published by Wiley.

Reprinted with permission of onPhilanthropy. Copyright © Changing Our World, Inc. 2007. All rights reserved.

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Additional Resources:

• Charities, lawmakers, and citizens are invited to visit the IRS website to view the proposed changes and give feedback on the proposed form, which the IRS anticipates using for the 2008 tax year (returns filed in 2009). Comments are due by September 2007. The redesign of Form 990 is based on three guiding principles: enhancing transparency, promoting tax compliance, and minimizing the burden on the filing organization.
  

FEATURED ITEMS

Foundation Directory Online

The Foundation Center publishes the definitive database of foundations and corporate giving programs in the United States and offers online subscriptions in a variety of plans. ResourceConnect subscribes to the top-tier Professional version of the Foundation Directory Online and invites all nonprofits to use this dynamic tool at the NEW Center in Ann Arbor.

The database includes over 88,000 detailed funder profiles, half a million recently awarded grants, and over 400,000 trustee, officer, and donor names—fully-indexed. Only Professional lets you text-search across a unique database of over 369,000 IRS 990 returns and explore unique funder portfolios with foundation news, RFPs, publications, reports, key staff affiliations, and printable color charts showing grant distribution patterns.

ResourceConnect staff will train you to use of the database, and coach you through a meaningful search, but are willing to do research on potential funders for you for a reasonable fee. Contact ResourceConnect (734-998-0160 x218) for more information or to make an appointment.

The Foundation Directory is also available at cooperating collections of the Foundation Center.

Nonprofit 2020 Conference: Issues and Answers from the Next Generation

Thursday, July 26, 2007 - Saturday, July 28, 2007
Johnson Center, Grand Valley State University, Grand Rapids, MI

According to the Bridgespan Group's report The Nonprofit Sector's Leadership Deficit, over the next decade nonprofits will need to attract and develop an estimated 640,000 new senior leaders -- the equivalent of 2.4 times the number currently employed. This statistic creates more impact on the sector as baby boomers prepare for retirement in the next few years.

How do we address this growing need? What solutions lie within our sector? How do we begin to better understand the needs of, and barriers to the sector's future leaders?

The Dorothy A. Johnson Center for Philanthropy and Nonprofit Leadership at Grand Valley State University, in partnership with the Center for Nonprofit Leadership and Management at Arizona State University and the Center on Philanthropy at Indiana University, is hosting Nonprofit 2020,a conference that will provide opportunity for emerging leaders to discuss the future of leadership for the nonprofit sector.

Are you an emerging leader eager to share your vision, ideas, and passion? Are you between 21 and 40 years of age and willing to engage in the development of innovative solutions?

Register online by July 5. Conference cost: $150.00. Email np2020@gvsu.edu for more information.

Free Media Exposure for Ann Arbor Nonprofits

Community Television Network's (CTN's) community media resources are available free of charge to Ann Arbor residents and nonprofit organizations based within the Ann Arbor city limits. Try any or all of these methods for getting news of your nonprofit out to the public:

• Submit a press release to Lucy Ann Visovatti . Infomation from this will be included on CTN's Channel 17 electronic bulletin board that runs overnight and on weekends.
• Promote your organization or a specific event in a five-minute spot on "Access Soapbox."
• Book "Access Ann Arbor," a half-hour talk show.
• Produce your own program on a regular basis utilizing CTN studio, camcorders, and editing equipment free of charge.

Find more details on the CTN website. For more information contact Lucy Ann Visovatti (734-997-1052).

Summer: Knowledge Revival Time

Let summer be your time to gain new skills and revive old ones. Laze in the shade in your hammock with a wireless laptop and learn how to plan an event, manage risk, or seek grants. Or choose an air-conditioned classroom to gather useful information and share your insights with other nonprofit professionals. Visit NEW's ResourceConnect Online Training Calendar to choose from a wide array of topics. A few highlights:

• Serving on a Nonprofit Board
  Monday, July 9, 2 p.m. - 5 p.m.
  NEW Center, Ann Arbor

  This workshop is for individuals considering joining a nonprofit board of directors. Learn the responsibilities for service and how BoardConnect www.boardconnect.org can help match you with an organization

• The Foundation Center's Proposal Writing Seminar
  Thursday, July 19, 8:30 a.m. - 4 p.m.
  Farmington Community Library, Farmington Hills, MI
  
  Learn the latest strategies on every aspect of a grant proposal and hear what U.S. grantmakers look for. The $195 fee includes a free copy of The Foundation Center’s Guide to Proposal Writing, 5th Edition (a $34.95 value).

• Nonprofit Seminar
  Tuesday, July 31, 12:30 p.m .to 4:30 p.m.
  Michigan's Department of Labor and Economic Growth, Corporation Division, Okemos

  An informative session covering director and officers duties and responsibilities, indemnification, charitable solicitations, financing, tax issues, filing requirements and record keeping. Also offered August 23, September 26 and October 24. The $50 fee includes a binder full of reference materials.

• Basic Grant Writing: Mastering the Fundamentals
  Wednesday – Friday, July 11-13
  Wayne State University, Detroit

  This two-and-a-half day program teaches the fundamentals, including how to plan, organize, and write a proposal following the basic rules of grant writing. The course is taught by Thomas A. Jones, a Michigan consultant with over 35 years of grant writing experience. Fee: $500.

• Evaluating the Adequacy of Your Insurance Coverage
  Nonprofit Risk Management Center
  Wednesday, July 11, 2 p.m. - 3 p.m., online webinar

  Learn how to assess acceptable risk and protect your organization with necessary insurance. $59
  

Day of Caring Southeastern United Way

The United Way for Southeastern Michigan Day of Caring 2007 will be held Friday, September 7. Wayne, Oakland, or Macomb County nonprofits may request a volunteer project until Friday July 13. Register online. Contact Angela Walker (313-226-9450) for more information.

Ethics Presentation

"When Temptation Strikes: Ethical Behavior in a Confusing World" is the title for the monthly meeting of the Association of Fundraising Professionals (AFP) Detroit on Tuesday, July 26. Nonmembers are welcome to attend. The presenter is Reginald M. Turner, a widely respected attorney from the firm Clark Hill who is among those named "The Best Lawyers in America." After his presentation, Mr. Turner, who currently chairs the City of Detroit Board of Ethics, will facilitate an interactive group exercise around some pressing issues facing the fundraising profession today. Register online or call 248-478-6076.

REGULAR FEATURES

Energize Volunteer Management Update will show up in your email inbox every month if you subscribe. June's hot topic: “Technology Acceleration: Grab Hold and Hang On.” Susan Ellis considers the breakneck pace of technological change and how blogging, social networking, and podcasting hold great potential for volunteer programs willing to experiment.

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.