In This Issue:
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Seven Member Characteristics of a Strong Board |
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Do Foundations Give Too Little? |
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Sumption & Wyland June Seminar -- Strategic Planning as a Tool for Development |
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Thanks for the Kudos! |
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Featured Links:
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Seven Member Characteristics of a Strong Board
Is your nonprofit board of directors a strong board? What do your board members contribute to the success of a nonprofit, both as individuals and as a group?
A strong board is made up of members who share passion, knowledge, diversity of experience, entrepreneurial talents, commitment, time, and connections to the broader community.
Not all board members will possess all seven characteristics. Each member will have different levels of the characteristics they have in common. The characteristics of both the individual and the group are important in determining the strength of your board.
When you look at your board of directors, can you identify these characteristics? If not, your board service isn't all it can be, and your organization is missing out on opportunities for growth and accomplishment.
Do Foundations Give Too Little?
There is a provision of a proposed bill, known as H.R.7, the Charitable Giving Act of 2003, that would change the rules foundations use to calculate how much they give in grants. Proponents see the change as a way to increase current grants to needy causes, especially when many foundations are reducing grants due to investment losses. Opponents see it as a threat to the long-term survival of foundations, forcing foundations to raid principal and/or cut back on operations at a time when investment returns are at historic lows.
Federal regulations currently guide a foundation to give 5% of assets each year, including operating costs. H.R. 7 would change the rules and exclude operating costs from the 5% guideline.
For example, a $1 million foundation would take $50,000 a year (5%), subtract its operating costs, and distribute the remainder to satisfy the current rules and avoid paying an excise tax. Under the proposed rules, the foundation would have to take operating costs out *before* distributing the $50,000.
If a foundation’s net investment earnings aren’t sufficient to cover the $50,000 plus foundation operating costs, then the foundation must solicit additional contributions or cash in some of its endowment (principal) to meet the distribution requirements and avoid the excise tax. The proposed change would make it more difficult for foundations to preserve principal and grow assets without additional contributions.
Some nonprofit sector professionals and policy experts argue that foundations should not exist in perpetuity; that they should expend their assets and plan to “go out of business.” Other experts argue that many foundations have been set up expressly for the purpose of making grants available beyond the foreseeable future for needs currently known as well as for those not yet known.
Regardless of the fate of H.R. 7 and the proposed changes in foundation distributions, the issues of how much a foundation grants each year, and whether foundations should exist forever, will likely attract greater public attention in the coming months. Both nonprofits and donors are looking for additional revenue amid economic uncertainty, and foundation assets are an attractive “savings account.”
Sumption & Wyland June Seminar -- Strategic Planning as a Tool for Development
Michael Wyland will be in Grand Forks, ND on Friday, June 13 to present a one-day program on strategic planning sponsored by the North Dakota Association of Fund Raising Professionals (AFP).
"Strategic Planning as a Tool for Development" will cover topics such as the context and process of strategic planning, ten key steps to creating and implementing a strategic plan, and using the strategic plan as a tool for fund development. Strategic planning is critical to an organization because it forces a focus on the mission, encourages constructive dissent and strengthens the organization.
For more information on this one-day program, please contact Mary Friesz of the North Dakota AFP at 701.328.9865 or email her at mary.b.friesz@bsc.nodak.edu.
Thanks for the Kudos!
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