We’re Watching and You Should Too

As KNN has gotten more engaged in public policy activities over the years, I’ve learned A LOT.  One of the biggest lessons I continue to learn is that in public policy (as in life), things don’t always go “our” way.  Despite best efforts and common sense, bad legislation is passed; good, needed legislation is overlooked; concerns are ignored; reform never happens; gridlock continues – the list goes on and on.  For someone like me, who is easily riled up and has been accused of being a bit controlling on more than one occasion, the world of public policy and advocacy can be really frustrating.  But I’m learning.  It’s a process.

In my last blog, I shared many of the concerns being voiced about the IRS’ proposed 1023-EZ.  Despite active outreach from KNN and many of our state association of nonprofit peers across the country, leaders of the foundation community, legislative leaders (including here in Kentucky) and state regulatory officials, the IRS implemented the Form 1023-EZ effective July 1, 2014.  This announcement has been met with some applause and lots of concern.

The good news is that the IRS did listen to some of the concerns and revised the eligibility threshold for gross receipts and lowered the asset ceiling so that only the smallest organizations will utilize the 1023-EZ.  But the IRS predicts that 70% of all applicants will be eligible for the new form and they believe that “the streamlined form will allow us to devote more compliance activity on the back end to ensure groups are actually doing the charitable work they apply to do.”  The problem with this is that, as several reports have stated, because exemption for Form 1023-EZ applicant is all but automatic, anyone who attests to meeting the requirements (whether they do or not) can now fairly easily obtain their tax-exempt 501 (c) 3 status.  And as one report stated, “Once they obtain their determination letter, fraudsters will be able to use and abuse that status with impunity for several years . . . giving an abusive Form 1023-EZ applicant years to rip off the pubic before it is shut down.

I remain concerned about the new 1023-EZ application process because the work of only a few “fraudsters” can easily damage the credibility of our sector and this matters to all of us.  And while the regular Form 1023 is tedious and needed revision, I do believe applying for 501 (c) 3 status should be a thoughtful process.  Unfortunately, KNN receives lots of calls from folks wanting to start a nonprofit and they honestly have not given it much thought (you know – ‘we’re going to get one of those big grants to fund everything’).

But the decision has been made and KNN is working to update our website resources for folks interested in applying for their tax-exempt status with the new information, and we’ll be hosting educational opportunities to be sure everyone is up to speed on the changes.  And more than ever, we’ll be promoting our Principles & Practices for Nonprofit Excellence in Kentucky Guide and Workbook, as well as the KNN members participating in our Best Practices Partnership  – highlighting their commitment to using best practices to achieve accountability and transparency.

To be certain, KNN’s priority is to advance and protect the interests of the nonprofit sector so that your organization can best serve your community and achieve your mission.  So we’ll be keeping a close eye on the impact of this decision, and I hope you’ll be watching too – – please let us hear from you.

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Danielle Clore

Executive Director

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A Difficult But Necessary Conversation

Theft.  Fraud.

I know, your heart has quit beating – right?  Mine too.  These are words no nonprofit executive or board member likes hearing.  But they are words that need to be said, conversations that need to be had.

To be certain, I don’t think there’s ever been a nonprofit executive or board who thought to themselves: “Let’s hire this person – they are likely to steal from us!” or “This volunteer should handle our funds, they seem really shady!”  But are we as nonprofits doing a good enough job of protecting our organizations (and ourselves as staff and/or volunteers entrusted with funds)?  Are we doing a good enough job at being good stewards of the funds entrusted to us?

We all know of examples of theft or fraud.  It’s awful for the organization and those they serve, sometimes resulting in an organization closing its doors and unable to recover. But more often, the result is a damaged reputation and shaken trust of donors, funders and constituents.  The good news is, there are excellent resources to help your organization avoid this awful situation.  A recent article talks about what to do when funds go missing.  But before that even happens, your organization can be proactive!  KNN’s Principles & Practices for Nonprofit Excellence in KY and accompanying Planning & Implementation Workbook can guide you through preventative steps, background checks for staff AND volunteers handling funds are ESSENTIAL (and KNN can help you find the most affordable service for this) and a CPA can help you implement effective internal controls – even without an audit.

Yes, talking about theft and fraud is a difficult conversation, but it’s a conversation that has to be had.  Remember, this isn’t about the people on staff or on the board, it’s about the people your organization serves.  Addressing this issue and taking steps to protect the organization isn’t personal and anyone offended or insisting that “I’ve got this” is putting your organization at serious risk.

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Danielle Clore

Executive Director

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A Nonprofit EZ Button – Good or Bad?

You know that feeling – you’ve been at something for a while, but change and even progress can make you feel like you’ve been thrown a curve ball.  Like switching from a flip phone to a smart phone – I knew how to use a cell, but holy cow this new phone has me sending email, surfing the web and more!  Well, that’s how things are for me right now at KNN.  We’ve been around for over 13 years, but many things are new to us since we applied for our tax-exempt status in the fall of 2012.

While receiving our tax-exempt status has created extra work and a few transition pains, the good news is that these experiences will help KNN better serve our members across Kentucky.  We’ll have “been there, done that” with nearly all aspects of starting a nonprofit and have broadened our scope of expertise.

One of the tasks involved in our transition to an independent 501 (c) 3 was filing the IRS Form 1023 in the fall of 2012.  This is a tedious form.  Some things were a pain, others – while still a pain, were good for forcing us to think though some structural issues that would later be very important.  There is currently a debate right now about the IRS’ proposal for a Form 1023 EZ.  Lots of folks have applauded this effort – after all, what’s not to love about anything called “EZ”?  But honestly, I’m not convinced the IRS’s plans are the right move for the sector.  Two recent articles – one from Tim Delaney of the National Council of Nonprofits and one from Michael Wyland featured in the Nonprofit Quarterly raise some valid concerns about why this proposal is not in the best interest of our sector.

One of my colleagues said the proposal shouldn’t move forward because “I had to fill out that awful Form 1023, so others should too.”  My 9 year-old makes similar arguments to me about a variety of things she doesn’t think her 6 year-old brother should get to do – and you guessed it, that argument doesn’t work for me.  But I do agree that there is reason for concern here.  While I do think that the Form 1023 should be improved, I don’t think the proposed EZ will do much to increase the public’s confidence in our sector.  At KNN, we get lots of calls from folks interested in starting a nonprofit.  Some of these calls are from thoughtful folks who are interested in improving our communities and understand (or want to understand) the public trust required to start and operate a nonprofit organization.  Other folks . . .  let’s just say, there are times that I’m very glad the complications and thought required for the current Form 1023 actually does discourage some folks from applying.

Let us hear from you – what do you think?  Is the IRS’ proposed Form 1023 EZ good for our sector — or not?

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Danielle Clore

Executive Director

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Rankings – Sometimes They Matter

It can be easy to get caught up in rankings.  Sometimes they matter, sometimes they don’t.  In the world of sports, some folks live or die by rankings and others simply hope a high ranking isn’t a jinx on the season.  In the case of KY Gives Day, rankings meant prize dollars – so they mattered!

Kentucky’s rankings in lots of areas aren’t always positive – educational attainment, obesity, unemployment – we’ve had our share of good and bad news over the years.  But recently released rankings give us in the nonprofit world some marching orders.

First, a Gallup poll ranked KY 50th in charitable giving.

Second, recent data from the Urban Institute ranks Kentucky among the top offenders in major contracting issues among government and nonprofits.  Issues like midstream changes in government contracts and needlessly complex contract reporting requirements are costing government and nonprofits time and money at a time when resources are scarce and the needs are great.

The good news is that KNN and nonprofits across Kentucky are already hard at work on these issues!  Efforts like Kentucky Gives Day are working to encourage philanthropy and others across Kentucky are promoting volunteerism – all with a goal of strengthening our communities.  The infographic below shows how Kentucky Gives Day is growing and making a difference.  With regard to our contracting woes, KNN’s public policy committee has this on our radar and plans to work on legislation in 2015 that will bring nonprofits and government together to create solutions that save nonprofits and government (taxpayers) time and money without compromising accountability.  To plug in to KNN’s public policy work, be sure to sign up for our Advocacy Council.

Resources are essential to focusing nonprofit energies on meeting community needs, serving our most vulnerable citizens and enhancing our quality of life.  Increasing philanthropy and improving contracting relationships with government are just two areas that matter to all nonprofits.  Your membership and involvement with KNN will help us improve these and other rankings that matter to all of Kentucky!

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Danielle Clore

Executive Director

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Rabbit Ears and Reynolds Wrap

In my last post, you may remember I’d just wrapped up watching Breaking Bad on Netflix.  I still miss it…

I have to admit, I’m not a big watcher of television and when I do, Breaking Bad is not the kind of show I would have normally been drawn to.  But we’ve cut back on cable and are trying out Netflix on Apple TV, so I asked my Facebook friends what show they’d recommend.  Breaking Bad won hands down.  And so about once every few weeks, my husband and I would stream this show through the internet and enjoy a few hours of escape into the world of Walter White.

On the morning after my final Breaking Bad episode, I was thinking about how technology has radically changed television and so many other things in our everyday lives.  Because of these advances, I was able to stream these episodes via the internet and watch whenever my husband and I could steal a few hours.  Just a few years ago, none of this was possible. My children have no idea what “rabbit ears” might have to do with television (surely some of you remember using Reynolds Wrap to boost your antenna signal?), and they’ll likely always think pausing and rewinding TV is the norm.  Yet, I just wrapped up a phone meeting on my cell phone because the internet based phone system in the KNN office is down.  Clearly, relying on technology has its benefits and its costs.

I have similar thoughts as we wrapped up our second annual KY Gives Day on April 9.  When I first started working in the nonprofit sector over twenty years ago (gulp), I didn’t know the internet existed and certainly never thought anyone would ever be able to use their credit card online to make a charitable contribution!  So many things in the world are changing with these advances in technology and with regard to fundraising, nonprofits and donors are coming along to take advantage of these opportunities.  KNN is often challenged with how to take advantage of the time and money saving technological advances, yet still engage our KNN members, donors and partners in a meaningful way to strengthen our sector.  While I am confident that the technology making events like KY Gives Day possible will help make raising funds more cost effective and engage more Kentuckians in philanthropy, some tried and true methods of communicating with donors like picking up the phone and a handwritten thank you note are still valuable tools.  Both are here to stay and we’ve got to adapt personally and professionally to operate effectively in this ever-changing environment – and sometimes that’s scary.  But stepping outside of our comfort zone and being innovative is what nonprofits are known for – so I know we are up to the task.

What new technologies is your nonprofit working with in 2014?  Please let us hear from you so we can be sure we are keeping up to speed and offering folks the latest information.  And I’m still looking for the next great show . . .

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Danielle Clore

Executive Director

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Escaping with Breaking Bad

I’ve just wrapped up watching the series Breaking Bad.  Whoa…

I have to admit, I’m not a big watcher of television and when I do, Breaking Bad is not the kind of show I would have normally been drawn to.  But with a cut back on cable and an interest in trying Netflix on our new Apple TV, I asked my Facebook friends what show they’d recommend.  Breaking Bad won hands down.  While some of the images and storyline gave me nightmares, I was fully engaged in the characters.  And with the beauty of Netflix on demand, I could get the kids to bed and watch multiple episodes.  I suspect I will forever see large duffle bags and wonder if they contain millions of dollars.

For certain, I’m not advocating that Breaking Bad is a series you need to check out for yourself.  And don’t worry, if you are watching it now – I absolutely won’t spoil it for you.  I am sharing my Breaking Bad experience because I realize on the morning after my final episode that I’m going to miss it.  I will miss escaping for one or two nights each week for a few hours into a world I will hopefully never know first-hand.

Yes, I suspect we’ll move on to some other television show our friends have recommended (right now, we’re leaning toward House of Cards and are open to other suggestions!) – but the point of this blog is to advocate for some kind of escape.  Every once and  a while, I think it’s good to check out of our reality.  Whether its television, a book, meditation, pinning recipes you’ll never cook on Pinterest, golf or whatever – I believe each of us needs time to escape and hopefully, in some way, recharge our batteries.

Post KY Gives Day 2014, I know I needed a break.  And you know that nonprofit work is stressful (I have to believe my husband when he tells me that work in the for-profit world is just as stressful).  So recharging our batteries in whatever way works best is important.  I believe it’s important for our work to serve communities and it’s important for our own well-being.  Burnout doesn’t benefit us as individuals and it doesn’t benefit the nonprofits and communities we serve.  So while I initially felt guilty watching Breaking Bad instead of wrapping up a proposal or report on a Sunday evening, now I don’t.  We all deserve time off.  We all NEED time off.

So, how do you recharge your batteries?  And what series do you recommend I check out next?

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Danielle Clore

Executive Director

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Remember Prom? This is WAY better!

It’s that time again – Kentucky Gives Day 2014!  Beginning at midnight, Kentuckians from near and far will come together online to see how much money we can raise in just 24 hours for the causes we care about – causes that make us proud to call Kentucky our home and causes working to ensure we live in a Kentucky we are proud to call home for years to come.

Last year, we referred to our inaugural KY Gives Day as a “nonprofit prom.”  This year, I’d like to think of this as our “senior prom.”  We haven’t quite graduated with our giving day yet, but we’re getting there and we’re still having a great time! prom photo

I’m excited to report that over 400 nonprofits from across Kentucky have again partnered with KNN to participate in tomorrow’s second annual Kentucky Gives Day.  Even if your nonprofit isn’t one of them, I hope you will log on to www.kygives.org to donate and use social media to encourage others to do so as well.  Why?

  • To see just how generous Kentucky can be.  Imagine the amazing things that could happen if every Kentuckian logged on to www.kygives.org and made a donation to causes they care about.  Encouraging philanthropy in Kentucky is a good thing – for all nonprofits.
  • To help your favorite nonprofits win prize money.  Thanks to our generous KY Gives Day sponsors, KNN, Inc. will be offering overall prizes for the top fundraising nonprofits, as well as “golden tickets” throughout the day to help participating nonprofits raise needed dollars for their mission.
  • To help participating charities take advantage of matching dollars.  Many of the participating nonprofits have secured matching grants, so donations have twice the impact on Wednesday and that’s a very cool thing.

You know how important  nonprofits are to Kentucky and our future.  The needs of our communities are great, and Kentucky Gives Day is an opportunity for every nonprofit and every Kentuckian to make a difference.  It’s big.  It’s special.  We’re making history.

I sincerely hope you will join me in logging on to give and give and give again.  The Kentucky Nonprofit Network, Inc., Kentucky’s resource for the nonprofits serving you, your neighbors and your communities, would be honored to accept your donation to support our mission and over 400 nonprofits would too.  It’s going to be a great day for our Commonwealth and you’ll want to be part of it!

So, please join me in getting your give on at this year’s “nonprofit senior prom!”  It’s going to be even more fun than last year.  See you online at www.kygives.org!

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Danielle Clore

Executive Director

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