Late breaking news  -  Update on Proposed Changes to CFC Regulations:

The Office of Personnel Management (OPM) received more than 800 comments about the proposed changes to the CFC regulations and there is a Congressional Hearing scheduled for Wednesday, July 26^th at 1:30 pm in the Rayburn House Office building to “Help Congress Better Understand the Impact of what OPM is proposing for the CFC.”

If you’re in the DC area, please plan on attending, if you’re in another part of the country or can’t attend, please contact your Representative to let them know the damaging impact the new regulations will have if adopted as proposed.   House.gov lists addresses and phone numbers for all Members of Congress by name and by state, if needed.

To see my complete analysis of the proposed regulations, “Back to the Drawing Board! - An Analysis and Recommended Responses to the Proposed Changes to the Combined Federal Campaign (CFC) Regulations” please go here:

http://cfctreasures.wordpress.com/2013/05/24/pdf-back-to-the-drawing-board-section-by-section-analysis-of-proposed-cfc-regulations/

I am reprinting it in its entirety the letter from the SavetheCFC coalition, organized by America’s Charities, please follow its directions for location and time of the hearing:

Hope to see you there!

Why Does OPM Want to Kill the Golden Goose of American Philanthropy?

By Bill Huddleston, The CFC Coach

The Combined Federal Campaign (CFC) matters because through it, and the generosity of the hundreds of thousands of Federal public servants who are the CFC donors, millions of Americans and others throughout the world are helped by the actions and services provided by  the more than 25,000 non-profits that are enrolled in the Combined Federal Campaign.  In the fall 2012 campaign,  more than $258 million dollars were raised, and in terms of actual giving, if the CFC were a foundation, it would be the 14^th largest foundation in the USA.   Over  the past five years, the CFC has generated more than $1 billion of unrestricted revenue for thousands of local, national and international CFC charities, which makes it the single largest source of unrestricted funds in the non-profit sector.

The CFC, which was established in 1960, is the federal government’s workplace giving program, and is administered by the Office of Personnel Management (OPM).  The CFC used to have both a vision statement and their mission statement  on the CFC Operations home page that were succinct and inspiring:

CFC Vision Statement:

A government that encourages and enables active employee participation in community and that fosters collaboration with business and the nonprofit sector to achieve this goal.

CFC Mission Statement:

To promote and support philanthropy through a program that is employee focused, cost-efficient, and effective in providing all federal employees the opportunity to improve the quality of life for all.

Sometime in the last decade, OPM removed the vision statement, and they seem to have forgotten what the mission statement really means, having just completed an analysis of the proposed changes to the Combined Federal Campaign regulations, that are massive and harmful to the CFC if implemented as proposed, but let’s first look at the present setup.

Workplace giving is a unique type of fundraising in the non-profit sector, and it’s important to understand the complex synergy that exists among all the parts.   In the current structure of Combined Federal Campaign, these are the major components:

• Recipients of services from CFC Charities  – the people and other beneficiaries of the services provided by the 25,000 CFC charities. (Millions of people ).
• CFC Donors  -The Federal Public Servants who are the CFC Donors (more than 800,000).
• CFC Charities – The 25,000 non-profits that are enrolled in the CFC, including approximately 1500 that are national or international in scope, and about 22,000 local charities.

• Federations – Federations are special types of CFC charities, consisting of groups of 15 or more charities with something in common, e.g. the member of Community Health Charities federation are all health related, EarthShare has environmentally oriented non-profits as its members, and the members of Children’s Charities of America deal with issues affecting children to mention just a few.  Federations can be national, international or local.  Federations assist their members with their CFC applications, provide joint marketing support, and provide other campaign related services.

• U.S. Federal agencies , that conduct the CFC campaigns, and this means anywhere in the world where there is a US Federal installation, (including places like Afghanistan and Iraq) there is a CFC campaign, as well as all civilian, military and U.S. Postal service facilities in the U.S.

• CFC Campaign Volunteers – The thousands of Federal employees who volunteer each year to help run their agency’s CFC campaign, solicit funds, organize charity fairs, and conduct the overall management of a campaign within a Federal agency.    When the CFC campaigns are conducted each fall, the CFC is the

• CFCs are organized regionally, and currently there are 184 CFC regions:
  • Local Federal Coordinating Committee (LFCC ) Each region has a Federal “Board of Directors” called the LFCC that is responsible for reviewing and approving applications for local charities to enroll in the CFC; and it is responsible for the selection of the Principal Combined Fund Organization (PCFO) which are contractors to the government  and there is a one to one match, so currently there are 184 PCFOs.
  • Principal Combined Fund Organization (PCFO) has two major responsibilities: the overall management of the CFC campaign in its region; and the fiduciary responsibility of sending the CFC donors gifts to the CFC charities they designated.  PCFOs are 501(c) (3) non-profits.  In the 184 regions, the PCFOs in the larger areas (e.g. major metropolitan areas, and areas with large Federal installations (e.g. Army, Navy, Marine, Air Force, Veteran Affairs hospitals, Postal Service regional centers, etc.), have larger staffs than in the more sparsely populated regions.

• Office of Personnel Management (OPM) has overall responsibility for the Combined Federal Campaign, including the CFC regulations and any appeals from non-profits that had their applications denied.   The OPM CFC office has a small staff of less than twenty.  It approves the applications of national and international charities, which currently number about 1500.

• Federal Executive Boards (FEB) and Federal Executive Associations ( FEAs).   In areas outside of the Washington DC area, regional entities responsible for regional government wide operations, and often have the LFCC function as part of their responsibilities.

• CFC-50 Commission  On the occasion of the 50^th Anniversary of the CFC in 2011, there was a special commission formed that was chaired by two respected former Congressmen,  the Hon. Tom Davis (R) from Virginia and the Hon. Beverly Byron (D) from Maryland, each of whom had experience with the government reform committee when in Congress.  There CFC-50 Commission conducted a series of meetings, and issued a final report in July 2012 that contained 24 recommendations to OPM on ways to improve the CFC. 

• Federal Retirees:  Retirees currently cannot have CFC designations deducted from their retirement pay, although the projections are that thousands of Federal retirees would participate in the CFC if they could.

CFC – The Golden Goose of American Philanthropy

When I give workshop presentations about the CFC, my workshop title is: “CFC—The Golden Goose of American Philanthropy.” I use that title because, just like the farmer in that fairy tale, most people do not understand how the CFC works; they just know it produces money for their non-profit, if they know anything at all about it. Depending upon their non-profit, it may produce a lot, or it may produce a little, and non-profit leaders are often not sure how it works, and what if anything they can do to improve their CFC results.  But just like the golden goose, the fundamental fact about the CFC is that it does work, and works well.  I’m not saying that it can’t be improved, but in the “results oriented” culture of today, the CFC , as it is currently structured, produces results that help millions of people every year, having generated $258 million in 2012.  And in, a miracle of government function, it actually has less red tape than almost any grant.

The synergy that exists among the component parts that I outlined means that in the current, decentralized structure, the workload is spread out among many different players, and that there are benefits to each.

Massive Proposed Changes to CFC Regulations by OPM

The Office of Personnel Management has proposed sweeping, and massive changes to the regulations governing the Combined Federal Campaign, and even though they say that they basing the proposed changes on the CFC-50 report, it many cases what they’re proposing was never discussed, or goes far beyond what was discussed in the CFC-50 Open Meetings and Final Report, or ignores what the CFC-50 Report recommended.

The proposed regulations are an odd combination of massive overreach; destruction of hundreds of private sector non-profit jobs in lieu of new Federal positions (which have not been approved or budgeted); hiding important sections in illogical sections of the proposed regulations, while simultaneously making multi-million dollar errors in the same section (in the section dealing with Federal retirees); making small irritating changes that are harmful to the CFC donors information gathering and make things harder for both the donor and the CFC charities; the destruction of multiple business models that have been successful for decades without adequate discussion,  and there are a few good ideas as well.   In many areas the proposed regulations are contradictory with significant differences about what the stated purpose is, and what the actual effect will be.

As proposed, the regulations are:

• Harmful to CFC charities, both large and small, and will definitely drive smaller charities whether local, national, or international out of the CFC.
• Harmful to CFC donors
• Harmful to CFC Federations
• Harmful to Federal agencies, including the leadership development of their workforce
• Harmful to the non-profit employees of the PCFOs, where all 184 private sector organizations are eliminated which means that at least 450 non-profit jobs now go to Federal positions.
• Harmful to the beneficiaries of the services provided by the CFC charities.  When just one of the items in the proposed regulations has been tried at the municipal or state level (going all electronic) there has been 50% drops in revenue.  If the regulations are implemented as proposed, a 75% drop in revenues is likely.
• Presume a massive transfer of functions from the private sector, non-profit PCFOs to the Federal workforce.

Hidden Regulations – Federal Retirees Section

Some of the proposed regulations are poorly organized, with no logic behind them, and they have the effect of hiding significant and important changes.  For example, the section dealing with Federal retirees instead of being in a “Donors” section is hidden in the “establishing Regional Committees” section, ignores the CFC-50 Commission recommendations, and makes a multi-million dollar error in judgment, all in less than a paragraph.   Here’s the link to the section that deals with retirees, hidden in the phrase “and also eliminates restriction on soliciting non-Federal personnel.”   950.103 Establishing Regional Coordinating Committees.

I have posted my analysis of the proposed CFC Regulations on the CFCTreasures.wordpress .com site and on the SAVETHECFC Linked in site.  It’s  50 plus pages with the regulations links, OPM’s analysis, my analysis, and recommended actions in a table form.

 Federal Government Public Comment Period Closes June 7, 2013.

This is the bad news, the good news is that these are proposed regulations, and we are in the Public Comment Period, which closes June 7, 2013.  By law Federal agencies must put out proposed regulations for public comment, and they must respond to all issues raised before implementing the regulations.  This is your opportunity to affect public policy in a meaningful way, and to stop the regulations from being implemented as proposed.   I think the overall message is that the regulations as proposed are harmful, and OPM needs to go back to the drawing board.

There are two ways to comment:  Send a written letter to the OPM’s Director of the Combined Federal Campaign, Keith Willingham or submit your comments via the electronic comment function of the Federal Register.   My recommendation is to use the Federal Register method because other members of the non-profit community will also be able to see your comments.

Subject: RIN 3206-AM68, Solicitation of Federal Civilian and Uniformed Service Personnel for Contributions to Private Voluntary Organizations

Reference Number: RIN 3206-AM68

Dates:    OPM must receive comments on or before June 7, 2013

Here are the links to the proposed changes to the CFC regulations.

URL:
https://www.federalregister.gov/articles/2013/04/08/2013-08017/solicitation-of-federal-civilian-and-uniformed-service-personnel-for-contributions-to-private

Shorter URL:  
https://federalregister.gov/a/2013-08017

HERE IS THE SPECIFIC PAGE TO COMMENT ON THE PROPOSED CFC REGULATIONS:
http://www.regulations.gov/#!docketDetail;rpp=100;so=DESC;sb=docId;po=0;D=OPM-2013-0006

Contact info for Bill Huddleston:

If you have questions or concerns about how you can help save the CFC as one of the most useful programs for millions of Americans who benefit from the $258 million dollars generated annually by the CFC, please don’t hesitate to contact me at BillHuddleston@verizon.net or by phone at 703-434-9780.

Email: billhuddleston@verizon.net

Phone: 703-434-9780

http://www.cfctreasures.wordpress.com

                 COMBINED FEDERAL CAMPAIGN (CFC) 

WILL HARM NON-PROFITS IF IMPLEMENTED AS PROPOSED

By Bill Huddleston, The CFC Coach, billhuddleston@verizon.net, 703-434-9780

NON-PROFITS WHO CARE ABOUT THE SINGLE LARGEST SOURCE OF UNRESTRICTED FUNDS IN USA – THE COMBINED FEDERAL CAMPAIGN – PLEASE READ AND COMMENT TO SAVE THE CFC!

HOW TO COMMENT ON THE PROPOSED COMBINED FEDERAL CAMPAIGN REGULATIONS

The Office of Personnel Management (OPM) has proposed massive changes to how the Combined Federal Campaign works.  There are more than 40 pages of proposed regulations, and my analysis of the changes can be found at the SAVETHECFC Linked-In Group and on my blog at www.cfctreasures.wordpress.com.  There is a public comment period for all proposed government regulations, and the comment period concerning the Combined Federal Campaign proposed regulations closes June 7, 2013.

There are two ways to comment:  Send a written letter to the OPM’s Director of the Combined Federal Campaign, Keith Willingham or submit your comments via the electronic comment function of the Federal Register.   My recommendation is to use the Federal Register method because other members of the non-profit community will also be able to see your comments.

Subject: RIN 3206-AM68, Solicitation of Federal Civilian and Uniformed Service Personnel for Contributions to Private Voluntary Organizations

Reference Number: RIN 3206-AM68

Dates:    OPM must receive comments on or before June 7, 2013

URL:
https://www.federalregister.gov/articles/2013/04/08/2013-08017/solicitation-of-federal-civilian-and-uniformed-service-personnel-for-contributions-to-private

Shorter URL:   
https://federalregister.gov/a/2013-08017

Here’s one example of a proposed change that will have negative impacts on CFC charities,  the Federal CFC donor, and most importantly the people that receive the services from the many CFC charities.

 Example of a Proposed Regulation Missing the Mark with wide negative consequences:

“Shifting the Campaign” is NOT the same as “Extending”

In the CFC-50 Commission
meetings there were many people and organizations that spoke to the benefit of extending the campaign to January 15^th from the current December 15^th end.  There are many reasons for this, including both year-end charitable giving and federal personnel schedules.

In watching all eight hours of video testimony, reading all the recommendations and appendices in the CFC-50 report, not a single person said “Shift the Campaign” from September to December to October to January.    “Shifting” is not the same as “extending” and there are many negative consequences to shifting, which I will describe in detail in later posts, but since there was no mention of this at all in 4 public meetings over many months, the idea was not addressed.

Will Cut CFC Revenues in Half:

If implemented as proposed these untested changes will have the effect of cutting CFC revenues for thousands of CFC charities in half, which is what has happened when such massive changes have been tried at the in workplace giving campaigns at the city and state level.  To see how much revenue was raised in your state through the CFC, please see this worksheet I created showing the state by state totals.
http://cfctreasures.wordpress.com/2013/05/02/combined-federal-campaign-2012-results-by-state

If you have questions or concerns about how you can help save the CFC as one of the most useful programs for millions of Americans who benefit from the $260 million dollars generated annually by the CFC, please don’t hesitate to contact me at BillHuddleston@verizon.net or by phone at 703-434-9780.

Most of the proposed changes are  bad – These measures Throw Out the Baby with the Bathwater, and toss the tub on top for good measure.

Bill Huddleston, The CFC Coach, said that “The proposed changes to the Combined Federal Campaign (CFC) regulations will have the effect of destroying the CFC for small non-profits, whether they are local or national.”

The CFC Regulations as proposed will not help CFC charities, donors, or the people the CFC non-profits serve.  In addition, huge areas of importance are not addressed at all in the proposed regulations, including the value of the CFC to the sponsoring agencies and their employees.

The regulations were published on April 7^th in the Federal Register, and there is a 60 day comment period which ends June 7^th.  In other posts I will show you how to use the Federal Register commenting software, but if you think the CFC is worth saving, now is the time to act!

Will Cut CFC Revenues in Half

As proposed, these regulations completely eliminate the face to face aspect of the entire CFC campaign. If implemented as proposed these untested changes will have the effect of cutting CFC revenues for thousands of CFC charities in half, which is what has happened when such massive changes have been tried at the in workplace giving campaigns at the city and state level.  To see how much revenue was raised in your state through the CFC, please see this worksheet I created showing the state by state totals.  (see separate post)

After 50 years of being the most successful workplace giving program in the world, and the single largest source of unrestricted funds for non-profits, these proposed changes “throw the baby out with the bathwater, and then toss the tub on top for good measure!”

Massive Changes Proposed Without Adequate Discussion

The changes planned the proposed regulations are gigantic, and the proposed regulations make mistakes along the classic “New Coke” marketing debacle, when after much discussion about how to improve Coke, classic Coke was pulled from the market, and the cry went up, “Wait, you didn’t tell us you planned to destroy Coca-Cola!”

That’s the effect these new regulations will have, they will destroy the CFC, which is the single largest source of unrestricted funds for non-profits in the US.   The proposed regulations contain an odd mish mash of sweeping changes with no specifics on how the changes will actually be accomplished, wipes out organizations that have been in existence for more than 50 years, and especially in time of sequestration, are divorced from reality, because in order to actually implement them, there would need to be ten times increase in the number of Federal employees working on the CFC.

CFC – 50 Commission

A little background is in order, the CFC celebrated its 50^th Anniversary in 2011, and at that time the head of the Office of Personnel Management (OPM), John Berry,  formed a commission, called the CFC-50 Commission, to look at ways to improve the CFC and keep it vibrant for the next 50 years.  The Commission was chaired by two former members of Congress, Hon. Tom Davis, (R-VA) and Hon. Beverly Byron, (D-MD), each of whom is well respected in the Federal service, and had served on government operations committees during their Congressional tenure.

CFC -50 Commission Public Meeting Videos (on Youtube)

The CFC-50 Commission met in public meetings four different times, and videos of these meeting are available at opm.gov/cfc. 
http://www.opm.gov/combined-federal-campaign/cfc-50-commission
(see list of videos at bottom of page).

The videos are difficult to watch because they are not optimized for viewing, there are no captions identifying who is speaking, and the speakers usually don’t identify themselves.  Some of them have 10 minute spans where the sound is inaudible.   There was testimony by invited participants, e.g. representatives from some of the larger charities, etc.

CFC – 50 Commission Report – 24 Recommendations

The Commission then produced their recommendations in a report, “Federal Advisory Commission Report on the Combined Federal Campaign” in July 2012, which contained 24 recommendations.

http://www.opm.gov/combined-federal-campaign/cfc-50-commission/2012-report.pdf
Two Good Recommendations

Some of these 24 recommendations survived intact in the proposed regulations, and some of them are good and make perfect sense, such as the ones dealing with new employees and the one dealing with disaster relief charities.

Many Proposed Regulations Do NOT Follow the Recommendations of the CFC-50 Commission

Many of the proposed regulations simply miss the mark from what the CFC-50 Commission actually recommended, had no or inadequate discussion about how some functions would actually be accomplished, and others are petty, or petty and unconstitutional.

Example of a Regulation Missing the Mark with wide negative consequences:

“Shifting the Campaign” is NOT the same as “Extending”

In the CFC-50 Commission meetings there were many people and organizations that spoke to the benefit of extending the campaign to January 15^th from the current December 15^th end.  There are many reasons for this, including both year-end charitable giving and federal personnel schedules.

In watching all eight hours of video testimony, reading all the recommendations and appendices in the CFC-50 report, not a single person said “Shift the Campaign” from September to December to October to January.    “Shifting” is not the same as “extending” and there are many negative consequences to shifting, which I will describe in detail in later posts, but since there was no mention of this at all in 4 public meetings over many months, the idea was not addressed.

The Proposed Regulations can be found here:

https://s3.amazonaws.com/public-inspection.federalregister.gov/2013-08017.pdf
.

In later posts, I will have information on how to use the Federal Register rule making portal to make comments.

Thanks,

Bill Huddleston

The CFC Coach

billhuddleston@verizon.net

703-443-9780.

Huddleston said, “The CFC is actually one of the largest volunteer programs in the country, and that in addition to the thanking the donors that contribute to a particular charity, that there are thousands of federal volunteers who each fall work together to run successful workplace giving campaigns in their agencies.   It’s absolutely fitting during National Volunteer Week to honor all the program and fundraising volunteers that help make the American non-profit sector the most vital in the world.”

Through the CFC, federal public servants have given more than $1 billion of their money to thousands of local, national and international charities over the past five years.  In terms of actual giving, if the CFC were a foundation it would be the 14^th largest foundation in the United States.

All CFC funds are unrestricted which means that the CFC is the single largest source of unrestricted funds for non-profit in the world.  The general rule of thumb in the non-profit world is that unrestricted funds are three times as valuable as restricted funds.

Some of the articles about the CFC results have focused on the drop in donations, Huddleston said, “What should be recognized is that even after three years of pay freezes, and bashing by politicians that Federal public servants know that the contributions they make through the CFC really do make a difference.”

The study done by the Chronicle of Philanthropy about the different levels of giving in the country is informative and interesting, but there are limitations inherent in tackling such a large and complicated subject.  The first limitation is that since the study limited itself to taxpayers who itemize (in general, households earning more than $50,000) it ignores the level of generosity by households that don’t itemize on their tax returns, so I think all the statistics probably under report the actual level of American generosity.

The second problem is the one of comparing religious giving versus secular giving, which is at best an apples to oranges comparison, and in reality is an “apple-orange” to “orange-apple” comparison, by which I mean that there are elements of both in each type of giving.  Sometimes when I read posts about religious giving in the non-profit forums, I really get the impression that the writers never attended Sunday School, and don’t really fundamentally understand how churches operate.  If the principles of non-profit fundraising are applied to religious giving, it would be considered an abject failure and ludicrous.  I can only speak about practices typical in Protestant denominations, but let’s take a look at it through the non-profit fundraising lens and you’ll see how ridiculous it looks from that perspective:

1. We will solicit our members in person 60 times per year.   There are 52 weeks of worship services, plus about 8 special offerings throughout the year (Christmas, Easter, One Great Hour of Sharing, etc.)
2. We will publicly ask for your contribution in front of other people. (It’s called passing the plate during the offering).
3. We will not provide individual thank yous (we will offer group thank yous).
4. We expect you to fill out a card at the start of each year (a pledge) where you specify how much you will give each week/month/year.  This is not really optional, and we will make a big show of you publicly turning in your pledge cards as part of the offering process.

If as a consultant on non-profit fundraising I presented that plan to one of my clients, I’d be laughed at the room, and probably never invited back.

Here’s what the difference is: Religious giving is not a charitable solicitation, it is an act of worship, and hence has a different set of social norms and customs.  By definition, becoming a member of a church requires a “leap of faith” and the purpose of this essay is not to debate why someone chooses to become a member of a congregation, and why someone else does not.  Each person makes their own choice about that.

Here are some examples of how there are elements of both secular and religious giving in each category.  The Salvation Army is usually and deservedly credited with being one of the most efficient and effective charities in America, which it is.  It is however, a church, the word “Salvation” in its name is not talking about the furniture and clothing salvaged and donated to it, it’s refers to saving their member’s souls.    Many churches that I know of gather food donations which are then transported to local food banks, and often make up a significant portion of a local’s food banks supply.  This doesn’t get counted in the IRS reports because it’s not a financial contribution, and since there’s no receipt (unlike donations to Goodwill, Salvation Army, Amvets, etc.) this act of giving doesn’t get recorded anywhere except as a food donation at the food bank.  Obviously some portion of religious giving goes to support the physical plant and salaries of ministers and staff, but there are often community benefits that are not captured anywhere, but are of value.    For example, in northern Virginia where I live, many churches’ Sunday School classrooms are used during the week by secular day care and pre-school non-profits.   In my church there is an award winning pre-school that’s been there for forty years, and could not exist without the physical plant provided by the church, but that asset never shows up on the pre-school’s financials because it’s not theirs.

The apples to apples comparison is that both offerings to religious institutions and gifts to charity are tax deductible, but after that fact, trying to draw distinctions about differences and similarities is problematic.

I think it’s more important and productive to figure out ways where religious institutions and charities can more effectively work together.  Another under-tapped resource in my opinion are the potential volunteers that religious congregations may be able to provide to charities that effectively use volunteers in accomplishing their mission.

Regards,

Bill

Bill Huddleston

The CFC Coach

MPA in Nonprofit Management, George Mason University

billhuddleston@verizon.net

703-560-1825

http://www.cfcfundraising.com

P.S.  Here’s the link to the Chronicle study:

http://philanthropy.com/article/How-The-Chronicle-Compiled-Its/133667/

Rick,

I’m glad you cited Jim Collin’s work regarding leadership and excellence, for the non-profit world it’s important to read both his book Good to Great (for businesses) and the accompanying monograph Good to Great and the Social Sectors: Why Business Thinking Is Not the Answer, where he describes how the non-profit sector is more complex than the business sector, and that the model of the “economic engine” that works well in the business environment is inadequate for the more complex non-profit sector.   For the non-profit sector he modifies the concept of the “economic engine (which is one of the key points of the for-profit model) to one of the “Resource Engine” that includes Money, Time and People.

I think one of the problems is more fundamental than not getting the right people on the bus, there is confusion about which game is actually being played.

To use a sports analogy, using RFK Stadium in DC as an example, it has had three types of professional teams play in it, baseball (for which it was originally designed), NFL football (the Washington Redskins in their glory days), and professional soccer, the DC United.  Just because the personnel making up one type of team are excellent, it doesn’t mean that a NFL football player would be a good candidate to be on the soccer team or to play professional baseball, especially if he or she hasn’t been told that what’s being played is a different game!    The non-profit sector tends to gloss over this reality and is attracted to all the glitz and money that the NFL has (business envy from the non-profit sector), which is more like professional soccer – not enough money, players work harder and longer for less money, they don’t get all the fancy endorsement deals, etc., and are continually “doing more with less.”

So the non-profit now recruits business people that they believe will be an asset to the non-profit, including the important responsibility of a board of raising funds.  So, what’s the first thing we tell board members is:

A. You need to raise money, and

B.  In the non-profit world it is unethical for development staff to be paid commissions for any fundraising results they achieve.

The first fundamental disconnect is with commission sales – no business owner thinks this is an inherently unethical way to do business, regardless of whether or not they pay commissions in their own business.   The non-profit sector says not only we don’t do business this way – we add that it’s unethical!   I know and understand the AFP position, and my point is that when you recruit successful business leaders, and you don’t tell them why and how the rules are different, while it may appear that the wrong people are on the bus, it can also be that you have not explained the differences clearly, e.g.  “You’re an All-Pro pro quarterback, how come you can’t hit a home run?”

This is an area where I think the non-profit sector has not done a good job in general, that of explaining and celebrating the differences among all three sectors of our society.

The commenting software doesn’t allow graphics, but here’s the description.

Non-profit Diagram by Bill Huddleston, MPA in Non-profit Management:

Modern societies need three components to function:  government, businesses, and non-profits.  Non-profits are the glue that holds society together, and while in the USAwe have a market economy, our society is bigger than the economy.  Non-profits are inherently different than businesses.   Governments are inherently different than businesses.  Here is a diagram showing the fundamental difference between businesses and non-profits.   It is astounding how many non-profit leaders (and political leaders) don’t do a better job of communicating to the American public about the value of all three components of society, all of which are critical.

   DIAGRAM -  Comment software doesn’t display graphics:    My diagram that shows these differences is being used in universities, and I’ll be glad to send it to anyone that sends me an e-mail at BillHuddleston at Verizon dot net with NP diagram in the text.          

The fundamental difference is that in the business example, the provider of the funds is also the direct recipient of the benefits of goods and/or services provided.   On its face, the diagram on the right is more complex than the one on the left, and this is what non-profit leaders have done a poor job of communicating this fact to the American public.

We don’t explain how different the game really is, and then we’re frustrated when the newly recruited board member doesn’t live up to expectations.

Regards,
Bill Huddleston, The CFC Coach

Showing Non-profits how to generate unrestricted funds with the Combined Federal Campaign, billhuddleston@verizon.net.

Susan G. Komen Foundation – Board Failure on a Massive Scale

There’s a March 18^th, 2012 article on the Chronicle of Philanthropy website, titled: Komen’s Crisis Came Not From Politics but From Poor Management Decisions                        

by Daniel Grunfeld and David Lash which contains a good analysis of the Susan M. Komen situation, but in my opinion the authors’ forecasts are a case of “looking through rose-colored glasses.” .

Since the initial “controversy” – it’s way more than just a bad PR move, the one group that actually has any power at all in this situation is the Komen’s Board of Directors. It’s the Board’s responsibility to determine whether or not the CEO needs to leave and it can fire her. They are the only group with that power.

And yes, I know that Brinker is also the Board chairman – (bad practice, btw) but she still has just one vote, and cannot prevent the Board from acting in its duty to the non-profit itself. Whether or not they will act, since the silence so far has been deafening, is a different question.

I agree with the points made in this analysis about what happened, and what non-profits should keep in mind (namely their mission and their constituents) as they make decisions.  Where I disagree with the analysis of Mr. Grunfeld and Mr. Dash is their prediction that:  “(Komen)… undoubtedly will continue to play a critical role in an important public-health issue for many years to come.”   

This prediction doesn’t accurately portray the sense of betrayal felt by millions of Susan B. Komen supporters, and the visceral sense that supporters who have gone on Breast Cancer walks for the past twenty years will never do it again for Komen, will never buy anything with a pink label again, the reports of yogurt with the pink label being the only one left in the dairy counter, etc.   Nancy Brinker took what was an apolitical organization, and because of her own personal beliefs, tried to turn it into a political one.  It didn’t work, and the group that hasn’t done its job yet is the Board of Directors.   If the mission of the Komen Foundation is to be Nancy Brinker’s personal piggy bank, then they’ve done their job.  If their job is to be responsible to Komen as a public charity, then they have failed, and are continuing to fail. 

My prediction is that three years from now, Komen may have an equal number of dollars in its bank account, but it has irrevocably harmed its brand, even if Brinker left, it will never have the corps of ambassadors it had built up over the last 20 years.  If the public awareness events (walks, bike rides, etc.,) even continue, they’ll just be a pale imitation of their past.  I also believe that pink branded goods will significantly decline.  Past supporters are cutting off the Susan B. Komen logos on their bags and covering them up with something else.  This is way past just a public relations blunder, it’s betrayal.

Bill Huddleston

The CFC Coach

www.cfcfundraising.com

March 24, 2012