Friday, April 15, 2011

MA Attorney General Blasts Pay of Nonprofit Directors

Note: This is a summary/reaction of a news story originally posted by an outside organization.  To read the original article, follow the links in this post.

Back in March, we posted a story about nonprofit health insurers in Massachusetts coming under fire for what was viewed as excessive pay for their board members and executives.  Now, the Attorney General of Massahussetts, Martha Coakley, has stated her intention to file legislation to make it illegal for public charities to pay their director's; this according to Bloomberg BusinessWeek.

Coakley made the decision to move on this after her office conducted a review about this type of compensation, and subsequently found their was no justification for it to continue.  Executive compensation has been a sore subject for many Americans in the wake of the Great Recession and Bank Bailouts, but the compensation that these health insurers were getting were particularly outrageous to MA residents as health care costs soared in the state.  These organizations receive tax benefits in addition to the other advantages non profits get, so Coakley saw even more reasons for this pay trend to continue.

Although the insurers defended the pay by saying that their boards dealt with very complicated issues, and needed to be compensated appropriately for their time.  However, Coakley said that her review found no evidence of this, and that unpaid boards at nonprofit hospitals dealt with the same issues. 

Obviously, this legislation is going to be met with stiff resistance from these non profit health insurers, and it remains to be seen whether it has the votes to make it through the Massachusetts State Senate.  We will certainly have an update on this law if we hear any more news about it.

Read the original article about this story at Bloomberg BusinessWeek.

Nonprofits Set to Hire, According to New Survey

Yesterday, the 2011 National Nonprofit Employment Trends Survey was released and the results were clear: nonprofit organizations plan to hire more aggressively this year, after a 2010 that saw a quarter of non profits cut positions.  In even more good news, turnover rate for nonprofits is expected to be very low, with responding organizations calculated it at 13%; in 2010 it was 21%.

Here are some more highlights from the report, which does contain some cautionary notes despite the optimistic news:

  • Although 84% of not for profits thought HR is pivotal to the success of their organizations, only 52% don't have a dedicated HR professional.
  • Despite the popularity of technology like social media, most nonprofits are still using newspapers and networking to recruit job candidates
  • Lisa Brown Morton,CEO of Nonprofit HR Solutions (which co-sponsored the survey), cautioned for nonprofits to prepare for higher than normal turnover rates, despite the optimistic news on that front.  She said that because many nonprofit staff are being asked to "do more with less," there is a chance that could lead to a surge in turnover rates in late 2011.
  • She goes on to urge non profits to focus on retention strategies.
More than 450 nonprofit executives and Human Resources people participated in the survey.  If you want to see the full results of this survey, download it for free at Nonprofit HR Solutions' website.

Thursday, April 14, 2011

Clinton and Bloomberg Join Forces to Fight Climate Change

Note: This is a summary/reaction to a news story from an outside news organization.  Please follow the links in this post if you want to read the original article.

Two political juggernauts are joining forces in an effort to fight climate change.

DNAInfo.com reported on yesterday's press conference by ex-president Bill Clinton and NYC Mayor Bloomberg, where the two announced that C40 Cities Climate Leadership Group, a nonprofit that Bloomberg was elected as chair last year, will be merging with the Clinton Climate Initiative.  At the press conference, Clinton said that he thought that this merger gave them a chance to really make a difference in the battle to stem the tide of climate change.  He added that a key to their success would be convincing people that what's good for the environment is also good for business.

It seems natural that New York City would be a major player in the climate change arena.  As Bloomberg noted at the press conference, cities are responsible for over 80% of the world's green gases.  Thus, he says, cities like New York have a major responsibility to take the lead in this fight..

With the political clout these two men hold, it would appear that this new organization should be destined for success.  But as we saw with Demi Moore and Ashton Kutcher yesterday, star power doesn't always equal results.

OKC Nonprofit Runs into Funding Speedbump

Note: This is a summary/reaction to a news story posted by an outside news organization.  Follow the links in this post to read the full article.

Remember that new Oklahoma nonprofit that was forming, The Alliance for Economic Development of Oklahoma City?  Well, it looks like they are going to have a harder time getting the money they want.

In an earlier story that was originally published by NewsOk, we learned that this new nonprofit was requesting $424,000 from the city.  It appears, however, that city government officials have some serious questions to ask them.  NewsOk reports that the Oklahoma City Council seems hesitant to provide the requested money because of questions about the group's economic and geographic diversity.  All of the proposed members of the group, including Assistant City Manager Cathy O'Connor, are white.  Pete White, a member of the City Council, bought this issue up in blunt terms, according to the NewsOK report:

“I’m struck by the lack of diversity on this group, both geographic, which doesn’t exist, and ethnic, which doesn’t exist."

Jim Couch, a member of The Alliance's proposed board, agreed with this assessment and promised that this issue would be addressed.  But the ethnic diversity is not the only thing that is causing the Oklahoma City Council concern.  There are also questions about the transparency of the budding organization.  O'Connor recently told the newspaper The Oklahoman that she didn't know if the expenditures of the group would have to be subject to the Oklahoma Open Records Act.  Ward 2 Councilman Ed Shadid specifically bought up this concern, saying that people are concerned that the group is "transforming a city apparatus and it’s at the exclusion of the Open Records Act."

At this point, it remains unclear of whether The Alliance will get the funding it has requested.  O'Connor tried to assure the council that her group would not be circumventing the council, that they would merely implement the decisions the council and other public authorities made.  This didn't seem to make anybody feel any better, however.  Specifically, NewsOK quotes Councilman White as saying that “In the past, my feeling has always been, though these were done through ad hoc committees, the council was always in the driver’s seat. It’s obvious by the makeup of this that we are not in the driver’s seat.”  So until the council votes on funding for the new organization, its future remains very much in the air.

Wednesday, April 13, 2011

Demi Moore Knows About Real Men

It seems like star power doesn't get you the attention it used to.  That's the hard lesson that Demi Moore and husband Ashton Kutcher are learning when it comes to their campaign to fight child sex slavery.  The campaign, called "Real Men Don't Buy Girls," involves photos of different celebrities (including Justin Timberlake and Bradley Cooper) holding up signs that have the groups title on it. 

But despite the star power behind this important issue, it appears it hasn't caught on too well, at least in the social media department. As of earlier this week, the Demi Moore and Ashton Kutcher Foundation (DNA) Facebook page had only 74 followers.  74!  It does beg the question of why this issue isn't catching on very well.  Just look at some of the statistics related to human trafficking (taken from the DNA Facebook page):

  • There are 27 million people forced into sex slavery today, one million of which are in the United States
  • 120,000 to 130,000 of the slaves in the United States are children
  • The global sex slavery market generates $39 million annually
  • The average age of entry into forced prostitution in the US is thirteen.
These are some disturbing numbers, so why aren't more people paying attention to the DNA Campaign?  One reason, at least according to a report by FoxNews, some think the celebrity duo isn't treating this issue with the seriousness it deserves.  The report states that some, including Norma Ramos of the Coalition Against Trafficking Women, think they are "dumbing down" the overall message with some of the ads they have put out in support of the campaign.  One of the ads, for instance, features Justin Timberlake shaving with a chainsaw, in order to show that "real men know how to shave."  That does sound a bit silly, doesn't it?

Well whatever the reason is, the fact of the matter is that the  "Real Men Don't Buy Girls" campaign just doesn't seem to be catching on as well as it should.

ABC News: Philadelphia Orchestra May Declare Bankruptcy

Note: This is a summary of a story from an outside news source.  Please visit the original story, linked in this summary, for the full article.

According to a recent report from ABC Local News, The Philadelphia Orchestra is just days away from declaring bankruptcy.  The nonprofit organization, famed for their distinctive and beautiful sound, have been dealing with serious financial troubles over the years.  Their Board of Directors are set to make a decision on whether to declare bankruptcy as early as this Saturday.

Although declaring a Chapter 11 bankruptcy would allow the Orchestra to get its financial problems settled, it would have an undeniably devastating effect on the music.  According to  the ABC news report, there is already a lot of tension between the musicians and the board and if a bankruptcy was declared, the musicians would most likely go 6 months without working again.  Although Philadelphia would certainly survive without the Orchestra, it would also leave a huge hole in the cultural center of the city. 

Even if a bankruptcy is not declared, the Philadelphia Orchestra is going to have to raise several hundred million dollars if they are going to want to continue at the scale they currently operate.  We will certainly have an update on this story when more news comes out, so stay tuned.  In the mean time, you can read the full article from ABC News.

Tuesday, April 12, 2011

Social Networks: Winners and Losers

Check out this this Social Media infographic I found on Mashable.  Essentially, it is about the winners and losers in social networking in the past year, and has a bunch of interesting stats.  Check it out below and let us know what you think (once again, thanks to Mashable for bringing this to our attention...click the image for a bigger version on their site):

Controversial E-Mail Sparks Calls for Nonprofit Director to Resign

Jerry Adams, director of the Human Services Coalition, is in hot water after an e-mail he sent sparked controversy.  The e-mail was in response to an announcement by Sandra Pruitt, head of People for Change, about forming a new group to advocate against government cuts to nonprofits.  Here is some of what Adams e-mail said:

"Where exactly do you get the authority to represent your organization as the Nonprofit Coalition of Prince George's County?" the email from Adams reads, adding later: "HSC represents a reasoned and tactical approach as [a] voice of the nonprofit community, and you confuse the issue with a second message and style ... it is a huge disservice to nonprofits."
Pruitt, who is African American, said she felt like she was "on the plantation, having to go to the master to ask for permission."  She and her supporters said they felt threatened by the e-mail, and are calling for Adams to resign.  For his part, Adams has apologized to Pruitt and "regrets" the tone of his message.  "I hope we can all put this behind us and get back to working hard for the nonprofits of Prince George's County," Adams said. 

Still, it doesn't appear the anger has been sated.  Seat Pleasant Mayor Eugene Grant, who wore a noose around his neck while at a meeting about the controversial message, said the "e-mail was a direct threat to a black woman from a white man that should be unacceptable in this county. To me, it's a modern-day lynching."

What do you think about this issue?  Was Adams in the wrong here, or are Pruitt and her supporters overreacting?  Read the full article at Gazette.net.

Monday, April 11, 2011

Nonprofits Kept Michigan Afloat During Great Recession

Mlive.com writer Rick Haglund just put up an informative article about Michigan nonprofits helped keep the state functioning during the Great Recession.  While the entire country was affected by the economic downturn of the past few years, Michigan might have been hit the hardest.  As has been well documented, the state lost some 850,000 jobs when the auto industry collapsed as a result of the recession.  As this happened, however, the nonprofit sector in Michigan experienced a huge growth spurt.

As a matter of fact, employment at nonprofits grew almost 23% over the past decade, while jobs in the for-profit sector fell about 21% (this according to a study at Johns Hopkins University’s Center for Civil Society Studies).  And today, almost 375,000 people in Michigan are employed at a nonprofit organization.  As Haglund says, during a time when budget cuts were tearing "a hole in the social safety net, nonprofits kept it from shredding."

According to Lester Salamon, author of the John Hopkins study, "Michigan is fortunate to be home to such an inventive, entrepreneurial nonprofit sector — one that is making a difference in a state under economic siege."

Despite all of this good news, questions do remain about whether the growth of nonprofits in Michigan is a good thing.  Because these organizations are tax-exempt, there are concerns that the tax base of state and local governments could shrink, which would put more pressure on their already strained budgets.  In addition, many nonprofits are having difficulty finding funding for their social services programs.

So while there is optimism about the impact non-profits are having on Michigan, it remains to be seen whether or not their overall effect will be positive.  Read the full article on this subject at Mlive.

Nonprofit CEOs Earned Big Paydays in 2010

Who said it didn't pay to work at a nonprofit?

According to a review of annual nonprofit reports by The Buffalo News, nonprofit CEOs earned hefty salaries in the past year.  In particular, the salaries for nonprofit health insurers in Western New York were particularly high.  For example, James Kaskie, CEO of Kaleida Health, earned a whopping $2.3 million annually. 

Even more curious, however, was that some of these organization saw their CEO compensation increase even as their overall earnings decreased.  In particular, HealthNow President Alphonso O'Neil-White saw his pay increase 11% (to $1.83 million) in 2010, even though the organization's surpluses fell to $52.7 million after a 2.3 percent drop in revenues.  HealthNow explained this discrepancy by saying that the decrease in revenue reflected "strategic initiatives" to cut costs and improve services.  As for White's pay increase, they said this was justified by the HealthNow's performance in 2009, when the company posted a $62 million surplus.

Executive compensation is obviously a sensitive issue these days, when many families are struggling to stay on their feet, so this news is probably going to be outrageous to some.  Read the full article about CEO pay at The Buffalo News