Hitting the Road Again

I’ve been on the road all summer and while it’s made the summer fly by and end too quickly, I’ve been blessed to make some wonderful memories over the past few months.  I hope you also had an opportunity to rest and relax (or not) with a vacation this summer or have one planned soon!  My unsolicited advice:  do not travel to Disney World in early August. :) dc goofy

I’m packing my bags again because KNN is hitting the road!  Our first stop is in Morehead on Thursday and in total, we’ll visit with eleven communities across the Commonwealth.  If you haven’t yet registered for one of our upcoming More Than Charity Town Hall Meetings, please take a minute and do so now!  Not only because I’d like to see you, but because your nonprofit colleagues need you to join with us for important discussions about our sector. 

If you haven’t heard yet: Kentucky’s nonprofit sector is Kentucky’s third largest industry – following government and retail.  Not only do we as nonprofit leaders need to know facts about the importance of our sector, but our community leaders and decision-makers need to understand these as well.  At our town hall meetings, we’ll be strategizing about how we can better communicate the work of our own nonprofit organizations and our overall sector, including how we can better communicate our importance as providers, employers and major contributors to the economy.

More unsolicited advice:  you need this information, decision-makers need this information and we need you to engage with us to get the word out, so please register today and plan to join us.

I look forward to seeing you soon!

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Danielle Clore

Executive Director

P.S.  Please help us spread the word as we travel across Kentucky by utilizing social media with the hashtag #morethancharitytour.

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Don’t miss out.

I’m not kidding you when I say we have great things in store for you at this year’s 12th Annual Kentucky Nonprofit Leadership Forum on October 28-29 at the Lexington Convention Center.   Our new two-day format offers MORE of everything – more networking, more information, more tools and more sessions on topics you’ve requested.  Online registration will be up and running later this week – be on the lookout for the email blast. 

I want to also be sure you don’t miss the opportunity to nominate an innovative organization, an outstanding board leader and/or a distinguished nonprofit executive for KNN’s annual awards.  Nominations must be received by noon this Friday, August 29.  Each award offers great visibility and recipient benefits.  2015 recipients will join the list of innovative organizations like Greenhouse 17 (click here to see their “prize” from last year – a video highlighting their work); outstanding board leaders like Lindy Karns serving Chrysalis House; and distinguished nonprofit executives like Florence Tandy, executive director of Northern Kentucky Community Action Commission. 

The KNN Annual Forum offers great education and networking, but it’s certainly a time of celebration – celebrating the best and most innovative of our sector.  I hope you will take time to nominate a deserving individual or organization and mark your calendar to join us for this year’s event!  I look forward to seeing you there!

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Danielle Clore

Executive Director

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How many desks can we fit in one office?

When KNN moved into our office in September, I never dreamed that by July we’d be nearly out of space.  But squeezing desks into tight spaces are the kinds of good “problems” I’m facing this month as we excitedly welcome two new team members to KNN!  I suspect many of you have experienced similar “growing pains” at your organizations, and despite the challenges, these are good problems and pains to have.

Sarah Brandenburg has been hired as our Director of Membership & Outreach.  She is a resident of Georgetown, graduate of WKU and comes to KNN from the Kentucky Travel Industry Association and is charged with ensuring KNN benefits and educational opportunities meet your needs.  She will also be working on expanding our membership so that our collective nonprofit voice continues to grow.

Ian McHugh has also joined our team as KNN’s first AmeriCorps VISTA member.   He lives in Lexington and is a graduate of Berea College.  Ian will also be helping us enhance our membership efforts, with a special emphasis on our work in Appalachia.

Please join me in welcoming Sarah and Ian to KNN and our nonprofit community.  I know both of them look forward to connecting with you and we definitely hope we see you at the KY Nonprofit Leadership Forum on October 28-29.  Please mark your calendar for the new two-day format of this annual event!

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Danielle Clore

Executive Director

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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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