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Future Philanthropists

Future Philanthropists. Framingham State University Spring 2012. Our purpose. Give away $5,000 (it’s harder than it seems). To do it, we look at:. Who we are What we value Our “programmatic” interests The needs of the community The organizations meeting those needs

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Future Philanthropists

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  1. Future Philanthropists Framingham State University Spring 2012

  2. Our purpose • Give away $5,000 (it’s harder than it seems)

  3. To do it, we look at: • Who we are • What we value • Our “programmatic” interests • The needs of the community • The organizations meeting those needs • The intersections of 1) our values/interests, 2) community needs, and 3) organizations that, in your assessment, have the ability to effectively meet those needs.

  4. What is philanthropy? • Philanthropy is the giving of time, talent, and treasure for the common good through • Volunteering • Financial support • In-kind support • Advocacy and social activism • Research

  5. Overview of the Nonprofit Sector • Nonprofits are one of three sectors (the other two are for-profit and public) • “Nonprofit” doesn’t mean that you can’t make money; it means that any surplus is put back into the organization, rather than divided between owners or shareholders • Nonprofit sector includes foundations that provide financial supports

  6. How is this sector different? • Focus on community and quality of life • Picks up the tasks that are citizen-oriented but that government cannot do or should not do (examples?) • A lot of trust involved—from those receiving the services and those supporting the service financially • Focus is on organizational goals, not financial ones • Nonprofits are businesses!

  7. Nonprofit Sector nationally • More than 1.5 million nonprofits • 20,000-30,000 new nonprofits started each year • US nonprofit sector is the sixth largest economy in the world—bigger than the entire economy of Canada or Russia

  8. Areas of mission focus • Human services (aka social services) (30%) • Health (20%) • Education (20%) • Youth and families (can overlap with other areas) • Environment (9%) • Arts and culture (13%) • Housing (5%) • Human rights (3% domestically)

  9. How many nonprofits? • Officially, 35,000 in Massachusetts (but many no longer operating) • Includes Scout troops, PTOs, youth soccer clubs, garden clubs • Only about 4,000 seek grants • 16.7% of Mass workforce works in nonprofits (where are they employed? • To find out how many in your town, go to • http://nccsdataweb.urban.org/massNonprofits.php

  10. How big are they? • An organization’s “size” is measured by its annual operating budget • 80% of all Mass nonprofits have annual operating budgets of less than $100,000; many have less than $10,000 • What can an organization do with $100,000 annually? Can you run a food pantry? Animal shelter?

  11. The organization’s MISSION • A mission is the need the organization meets • A mission statement is a compelling, “tool” that explains the primary purpose and value of the organization. It should answer: why we are here, what we do (broadly), and for whom. • The missionguides decisions about programs, services, and funding.

  12. Sample mission statements • Organization for the Assabet River • Protect, preserve and enhance the natural and recreational features of the Assabet River, its tributaries and watershed • HOPE • To counter violence and promote peace through education, leadership development and mentoring • (Notice that the mission statements don’t explain HOW in much detail; this provides some flexibility in their services)

  13. Governance • Governed by a volunteer board of 6-30 people • Managed by an executive director or CEO (some effective nonprofits have no staff) • Board has ultimate responsibility for the organization’s financial sustainability through • Revenue-generation (fees, donations) • Sound budgets for programs/services

  14. What does the staff do? • Deliver programs and services • Strengthen the “capacity” to deliver programs and services • Fundraise • Operations • Financial and other management • Recruit and manage volunteers • Be an active and visible partner in the community

  15. Nonprofits as economic engine in Mass. Employ almost 17% of workforce (national average is 10% of workforce) 57% of nonprofit jobs nationally are in health care (hospitals, nursing homes, health clinics) Nonprofit jobs continued to grow in the last decade, even during recession Why do you think nonprofit jobs are somewhat recession-proof?

  16. Two pennies! • Two pennies of every dollar of personal income (per capita) in Mass is spent on human services • Basic services: food pantries, homeless shelters, heating assistance • Family issues: domestic violence, child abuse, juvenile protection • Some health-related: aging, mental health, hunger/nutrition, substance abuse, physical and developmental disabilities (group homes, etc.)

  17. Fun facts about staff • Most nonprofits have fewer than 5 staff people • Average salary for an executive director at nonprofits that have an annual budget of less than $1 million? • Average salary for a female executive director at a nonprofit with a budget of less than $500,000? • Average salary for a male executive director at a nonprofit with a budget of less than $500,000?

  18. How are they funded? • 71% of revenue is from fees for services and goods • 9% of revenue is government grants (decreasing!) • 7% from events, dues, investments • 13% of revenue is from contributions • 83% from individual donations • 11% from private foundations • 5% from corporations

  19. Individual contributions • Americans give 2% of their annual income to nonprofits. How does that strike you? • 35% of those donations went to religion subsector • 14% went to education

  20. Motivations for giving • Personal connection • Wanting to make an impact on their communities or specific cause important to them • Sense of personal responsibility • They were asked! • Tax deductions

  21. Giving guidelines • Of all funds raised by professional tele-fundraisers, an average of 40% goes to the charity • Nonprofits HAVE to be financial transparent: anyone can see their tax returns and other financial info on the state attorney general’s website and other sites, such as Guidestar

  22. Funding trends • The trend is for nonprofits to build collaborations and partnerships within the nonprofit sector and cross sectors. Two or more organizations often apply for a grant together. • Many donors (and even foundations!) are reluctant to give money that goes toward overhead (aka staff) and instread restrict their gift for a specific aspect of a program or service. • Nonprofits have increasing difficulty paying their staffs, especially at staff-intensive services like hotlines

  23. For next session • Look deeply at some organizations: • What needs does the nonprofit meet • Structure of the staff • Who is on the board • What do their budget and financials look like (find 990s on Guidestar) • Use these sites: Guidestar, Charity Navigator, idealist, taxexempt.com, Mass Attorney General’s Nonprofits & Charities Division , nonprofitdata.com

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