The Wall Street Journal has published a story on the new 990 form, and how it will impact donors decision making:

New IRS Rules Help Donors Vet Charities
Revised Tax Form Will Make Nonprofits Reveal More About How They Spend
By MIKE SPECTOR
May 29, 2008; Page D1

Americans searching for the best places to make charitable donations are about to get more help from the federal government.

The Internal Revenue Service, the tax agency that serves as the main regulator of nonprofits, is ramping up efforts to increase charities’ transparency as donors clamor for better tools to evaluate how their money is spent.

The first tangible signs of reform are happening now, as charities’ annual tax form — known as Form 990 — gets a makeover for the first time in nearly 20 years. The changes promise to provide potential donors with a standardized, one-stop shop for information on charities amid a sea of varied nonprofit watchdog Web sites. Charities begin using the new form next year, when they report their 2008 information.

WHERE TO FOLLOW THE MONEY

• Guidestar (www.guidestar.org1) is a one-stop shop for IRS filings.
• Charity Navigator (www.charitynavigator.org2) scores charities on a scale of 0 to 10 for efficiency.
• American Institute of Philanthropy (www.charitywatch.org3) grades charities on spending and fund-raising costs.
• For tips on how to help victims in China and Myanmar, see related article4.The form, which nonprofits must continue to make available to donors and others on request, will now include a top summary page listing comparative financial information — revenues and expenses — over a two-year period. The next page requires charities to detail their organization’s accomplishments during the past year, moving that information closer to the front of the form than before. Other sections ask charities to provide more-detailed information about fund raising, governance and compensation for top executives and trustees.

“I will probably use [the 990 form] more in the future because it has more due-diligence questions that I typically would ask,” says frequent donor L.H. Bayley, the 72-year-old chairman of a Chicago-based investment firm who likes to scrutinize charities’ missions, board makeup and finances before donating. But he also believes the new IRS form will be “no substitute” for donors doing their own extensive homework on charities.

In recent weeks, Americans have been opening up their wallets to help victims of twin disasters in Myanmar and China. It is all part of an explosion in charitable giving. Americans gave $295 billion to charities last year, and donations from individuals dwarfed corporate gifts and grant-making totals from the nation’s largest private foundations.

The number of charities has surged about 85% over the past decade to 1.2 million, said Steven Miller, commissioner of the IRS’s tax-exempt and government-entities division. During the same stretch, he said, the money they took in annually more than doubled to about $2 trillion.

The IRS’s move to shine a brighter light on nonprofits comes amid increased scrutiny over how charities spend donations. In the mid-1990s, the president of the United Way of America was convicted of bilking the charity out of nearly $1 million for personal spending and gifts for his girlfriends. More recently, Congress has scrutinized spending patterns of various veterans’ charities and questioned whether universities are devoting enough of their endowments to financial aid amid skyrocketing tuition costs.

While the IRS has lagged behind in developing new oversight methods for charities, a number of groups have cropped up online to fill the watchdog void. Most are nonprofits themselves.

For those wanting to sift through data, Guidestar.org5, a Web site run by Philanthropic Research Inc. of Williamsburg, Va., provides quick access to recently filed 990 forms and several guides to tax-reporting rules for charities. Most of the site is free, though access to more-customized data — such as the ability to search for specific nonprofit executives and their compensation — requires monthly subscriptions ranging between $30 and $100.

Other watchdogs, including Charity Navigator and the American Institute of Philanthropy, rank or grade charities based on efficiency assessments. Both organizations calculate so-called expense ratios, or the percentage of a group’s spending that goes toward charitable programs versus fund raising, salaries and other costs. The American Institute of Philanthropy says well-run nonprofits direct at least 60% of their spending toward charitable programs, with the rest going to administrative costs.

“People want to know what the charity’s going to do with their money. That’s the bottom line,” says Daniel Borochoff, president of the American Institute of Philanthropy.

The spending ratio is among the most controversial assessment tools for nonprofit leaders and advocates, who say such measures can be misleading and are unfair to small start-ups that generally face higher operational costs. Vetting independent contractors for long-term charitable housing projects, for instance, might be tagged an administrative expense but ensures higher ethical and quality standards when the actual program begins. In addition, spending ratios don’t account for intangible impacts on a community, something nonprofit advocates say is hard to measure.

Such criticisms helped nonprofit lobbyists beat back a suggestion from the IRS that charities include spending ratios on the summary page of the new 990 form. Mr. Miller, the IRS deputy commissioner, says he expected pushback on the spending ratio but expressed “disappointment” that the agency and nonprofit sector couldn’t agree on an alternative set of checklist measures that would allow potential donors to make quick “apples to apples” comparisons of charities.

Still, the new tax form provides streamlining and more detail. The form’s new summary page immediately greets potential donors with comparative financial data, a synopsis of a charity’s mission and an outline of a group’s governance and operations. For those wishing to calculate spending ratios, the relevant data can be found in sections detailing revenue and expenses. “It’s not a difficult hunt,” Mr. Miller says.

Governance and compensation disclosures will be more rigorous. The revised tax form devotes an entire section to how a group is run. Nonprofits will now have to disclose whether their boards review the tax form before it is filed and what metrics organizations use to determine pay for top executives and managers. Other new disclosures include whether an organization has a whistleblower policy and how many board members are independent.

When reporting compensation, groups now have to report payouts using classic tax-filing standards found on W-2 and 1099 forms. Under certain circumstances, such as when an employee makes more than $150,000, additional disclosures are triggered, including supplemental retirement programs and stock compensation, which nonprofit executives sometimes receive from an affiliated for-profit group.

Other disclosures include whether nonprofits provide executives or other employees with first-class air travel, expense accounts, housing allowances and personal bodyguards, chauffeurs and lawyers, among other perks.

Similarly, if a charity reports more than $15,000 in gross income from fund-raising events or spends more than that amount soliciting donations, the new form triggers a laundry list of disclosures about the group’s fund-raising activities. Those disclosures include the group’s fund-raising methods and whether the charity pays anyone $5,000 or more to solicit donations for the group.

The IRS isn’t finished. Mr. Miller wants to broaden the agency’s powers to more robustly monitor nonprofits. In a recent speech, he raised the possibility of restoring the agency’s use of a seldom-used tactic known as the “commensurate test,” which examines whether nonprofits are spending money on charitable programs “commensurate” with their financial resources.

In its most liberal interpretation, failing the test could allow the IRS to use its nuclear option: revoke an organization’s tax-exempt status. The IRS is only studying the approach right now, but Mr. Miller wouldn’t rule out more aggressive oversight down the line.

“We’re concerned with whether charitable donations and charitable resources are being used for charitable purposes,” Mr. Miller says. “There may come a time when we take a look to see if we have all the tools in our toolbox.”

Write to Mike Spector at mike.spector@wsj.com6

In Friday’s print edition, the Nashville City Paper published an article on the Tennessee Women’s Theater Project.

Women command the stage in annual arts festival
By Amy Stumpfl,Friday, May 16, 2008 12:53 am
Updated: Friday, May 16, 2008 12:53 am

When Maryanna Clarke, artistic director of the Tennessee Women’s Theatre Project, sustained a serious back injury last year, she thought it might mean the end of a promising season for the fledgling theater company.

“We had just made a nice splash with Nicked & Dimed when I hurt my back,” said Clarke, who founded the company in 2005. “I was flat on my back for 10 weeks – it was just awful. Worst of all, we had already booked the theater for another show in May 2007. I knew that I was not physically able to handle a full production, but I didn’t want people to forget about us either.

Unwilling to give up her dream, Clarke began brainstorming other ways to continue on.

“I started thinking that there must be other women out there with work to share who might not have the resources to get it on stage. I sent out the call and had 50 replies almost immediately. I knew we were on to something.”

Thus the Women’s Work Festival was born. The theater festival showcased a wide range of performances, providing an unusual treat for arts enthusiasts.

“We were so pleased with the response, and knew we had to make this an annual event,” Clarke said.

This year’s celebration includes another impressive line-up of talent, including poetry and dance, music and film. Local favorite Carolyn German will be on hand to present a staged reading of her new musical Nashville – The Music City Musical. And singer-songwriters Melissa Brett, Connie Hutto and Shirley Rutland will present an evening of music.

Other highlights include an appearance by the Nashville Chinese Culture Club and a staged reading of If I Give My Heart to You, a new play by Dr. Dorothy Marcic, adjunct professor at Vanderbilt and author of Respect. The artwork of photographer and calligrapher Sue Dippold, artist Maria Faith, photographer Kim Kinsley-Herrera, and graphic designer Amy Olert will also be on display in the lobby for the run of the festival.

“It’s exciting to see so much variety,” Clarke said. “That’s one of the reasons I started the Tennessee Women’s Theatre Project. I’ve always said that if the theater holds up a mirror to society, where are all the women? We represent the majority of the population, but that’s not the case in the theater. That’s why we’re here. That’s our mission – to give voice to women through theater arts.”

What: TWTP’s Second Annual Women’s Work Festival
When: 7:30 p.m. Thursdays, Fridays and Saturdays; 2:30 p.m. on Sundays through May 25
Where: Z. Alexander Looby Theater, 2301 Rosa L. Parks Blvd.
Cost: $5 per ticket, $25 for festival pass
Info: 681-7220, twtp.org

 

Mark McCaw, program administrator of Siloam Family Health Center in Nashville, is the 2008 recipient of the Executive MBA/Center for Nonprofit Management Sponsorship. The award is financed by Vanderbilt’s Owen Graduate School of Management and the winner is chosen through a partnership with the Center for Nonprofit Management.The tuition sponsorship was established in 2005 to recognize one deserving Middle Tennessee nonprofit executive annually. Valued at approximately $80,000 toward the full 21-month Vanderbilt Executive MBA program, the sponsorship is open to executives and senior staff members of any Middle Tennessee 501(c)3 organization who have demonstrated commitment to serving in the nonprofit sector.

“This sponsorship is just one of the many programs that helps bring Vanderbilt and the greater Nashville community together and we are thrilled to be a part of it,” said Jim Bradford, dean of the Vanderbilt Owen Graduate School of Management.

Siloam, a Christian ministry, provides medical care to a primarily refugee and immigrant population, regardless of ability to pay, and seeks to provide for the needs of the whole person – physical, emotional and spiritual.

McCaw said he was “honored and humbled” to have been selected for the award. He plans to put his Executive MBA training to work at Siloam by contributing to the design of a pilot training institute that would help other communities emulate the integrated primary care program at Siloam.

“Siloam’s been on a tremendous growth spurt,” McCaw said, noting that the Center had 1,100 patient visits in 1999 compared with 17,000 now. “We feel a need to level off. We want to meet the needs we can and meet them well. We have a strong, sustainable program but we do not want to become so large that we lose the special touch we have with our patients.”

A training institute would help other communities learn the necessary components to start similar programs, he said.
In addition, McCaw said the MBA training would help provide him the business acumen to handle the challenge of dealing with an increasing number of refugee patients. He also looks forward to the opportunity to network with corporate health care executives through the Owen School. “It’s a tremendous opportunity for dialogue,” he said.

“Mark is someone who will contribute considerably to the collective learning environment at Owen, with expertise in some of the toughest state and federal issues in health care ranging from refugee screening to human trafficking,” said Tami Fassinger, associate dean of executive programs. “He will add significantly to the classroom experience from his nearly 20 years in nonprofit service.”
Last year’s nonprofit executive selected for this honor was Michael McSurdy, vice president of program services for the Oasis Center.
“The Center for Nonprofit Management is pleased to collaborate with Vanderbilt to provide this exceptional opportunity to such a deserving recipient,” said CNM President Lewis Lavine. “This is one of CNM’s valuable partnerships that enable nonprofit executives to receive professional training and remain in our sector serving the community.”

McCaw, who joined the staff at Siloam eight years ago, was working in the banking industry in 1991 when his life’s mission began to change. “I felt a call by God to go into an area of service where I would have a greater impact on the well-being of others,” he said. After going back to school and receiving a graduate degree in social work, he went to work for the Tennessee Primary Care Association (TPCA), where he learned about Siloam as one of his clients. It was then a fledgling heath care provider for the poor.

He became a patient of Siloam when, a few years later, he left TPCA for a second job that he subsequently lost. Sick and without insurance, he remembered Siloam and sought out medical care.
Siloam CEO, Nancy West, saw him in the waiting room, remembered him and asked him to volunteer his time at Siloam while he job-hunted. Job offers came in, but West instead asked him to stay on board at Siloam. “It was a divine way to go about finding a job,” McCaw said.

With a mission of integrating the Christian faith with serving those in need through health care, Siloam is a perfect fit for McCaw. His primary job has been to put organizational structure in place to deal with the growing operation. “I serve more as an administrative backbone on the program side to ensure consistent quality,” he said. “I make sure we meet donor expectations as well as deal with a myriad of complex issues the clinic faces in providing care to low-income uninsured patients.”

As part of its service to patients, Siloam incorporates hundreds of volunteers including many physicians from the Vanderbilt University Medical Center. McCaw works with other staff to train staff and volunteers in developing their ability to provide, “culturally competent, whole-person care.”

“It takes a great team and a lot of hustle to make that happen,” he said.

The Center for Nonprofit Management is an organization committed to helping advance Middle Tennessee nonprofits by providing education, consulting, research, performance evaluation and recognition. The Center was established 21 years ago and currently has more than 600 member agencies.

The Executive MBA program at the Vanderbilt Owen Graduate School of Management began 30 years ago, meeting on the Vanderbilt campus on alternate weekends so professionals can earn their degrees without interrupting their careers.

For more information about Siloam, visit www.siloamhealth.org.

Vanderbilt Owen Graduate School of Management is ranked as a top institution by BusinessWeek, The Wall Street Journal, U.S. News & World Report, Financial Times and Forbes. For more information about Owen, visit www.owen.vanderbilt.edu

Published Online today in the Nashville Business Journal:

Dispensary of Hope gets funding to assist poor, underserved with medications

Nashville Business Journal

The Dispensary of Hope – a network of physicians, pharmacies and corporations – is launching in Middle and East Tennessee, with the support of Saint Thomas Health Services.

The not-for-profit plans to create a statewide and eventually national network of partners to assist the poor and undeserved who need mediations.

In a three-month trial program based at Saint Thomas Health Services hospitals, the dispensary collected more than $10 million in pharmaceuticals, filled more than 75,000 prescriptions and gave an additional $3 million in medications to other Tennessee clinics.

The Dispensary of Hope network now includes more than 300 physicians and clinics and dispensing sites in Nashville, Murfreesboro and Knoxville.

Saint Thomas Health Services Ventures has provided the Dispensary of Hope with seed funding and corporate support and has committed $1 million over the next four years to the program.

The State of Tennessee recently pledged another $1 million to further expand the program’s reach.

 

Nashville RBI (Reviving Baseball in Inner Cities) is interested in finding out if there are any non-profits that would like to share their existing accounting/administrative/back-office functions OR if there is anyone out there aware of any experienced, part-time help we might pursue.

From Saturday’s Tennessean:

May 11, 2008

Food bank hopes donations meet need

Hard times force more to seek help

By NATALIA MIELCZAREK
Staff Writer

Considering the slowing economy and rising gas prices, a local food bank isn’t even dreaming of topping last year’s donations through the annual Stamp Out Hunger drive.

The Second Harvest Food Bank of Middle Tennessee just hopes to get enough to keep up with the growing demand – and that may prove difficult.

“Because of the economy, people who used to be donors are now turning to our emergency food box program for help,” said Marina Delgadillo with Second Harvest Food Bank, a nonprofit that helps feed needy families.

Second Harvest Food Bank is among thousands of charitable organizations across the country that benefited from Saturday’s nationwide one-day food drive supported by the National Association of Letter Carriers. As the carriers dropped off mail, they picked up bags of donated food.

Last year, the event yielded 750,000 pounds of canned soup, vegetables and other nonperishable items in Middle Tennessee. Delgadillo said this year’s donations will be counted by Monday.

The tough economic times have pushed many here and across the country to also rely on the federal food stamp program, nearing the 2005 level
of requested assistance after Hurricane Katrina displaced thousands.

“We’re seeing price increases, and wages are remaining stagnant,” said Heidi Shierholz, an economist at the Economic Policy Institute, a nonprofit, nonpartisan organization in Washington, D.C.

“So a lot of families get strapped and get pushed and are required to take up services that they may not require in a different type of economy.”

West Meade resident Brenda Lynch and her two little boys gathered canned goods off the shelf in the pantry – pinto beans, turnip greens and cranberry sauce – and packed them in a plastic bag left by a letter carrier a couple of days before.

“We try to participate every year. This is not difficult; it’s taking stuff out of your pantry,” Lynch said Saturday morning. “I’ve known people who’ve had hard times. We’ve had hard times ourselves, but not that desperate.”

 

Nicholas Kristof chooses to highlight the positive impact high school students are having on philanthropy in the NY Times:

May 11, 2008
Op-Ed Columnist
Saving the World in Study Hall
By NICHOLAS D. KRISTOF
Teenagers are supposed to be sullen and self-absorbed, but Rachel S. Rosenfeld never got the memo.

Rachel is a high school junior in Harrison, N.Y., who came down with a painful intestinal ailment that forced her to miss the entire 2006-7 school year. So she resolved that if she couldn’t go to school herself, she could at least help other kids who wanted to.

From her sickbed, Rachel sold T-shirts and solicited contributions to build a 316-student elementary school in rural Cambodia. Borrowing an idea from university fund-raising, she offered naming opportunities: for $25, donors could buy chairs to be named for them. All told, she raised $57,000, which was channeled through an aid group, American Assistance for Cambodia.

Now Rachel is mostly healthy again and back in school, but over the December vacation she traveled to Cambodia to cut the ribbon at the R. S. Rosenfeld School.

“The children were all so grateful and well-behaved,” Rachel said. “It truly was a life-changing experience.”

College students used to be the activists, but increasingly they’re joined by high school pupils and even younger children. The spotlight may be on billionaire philanthropists like Bill Gates, but one of the country’s healthier trends has been the rise of piggy-bank philanthropists.

Two high school students in Massachusetts, Ana Slavin and Nick Anderson, started a nationwide high school campaign, Dollars for Darfur, that has raised $420,000 for the people of Darfur from 440 schools.

The humanitarian prodigies like Ana and Nick are laudable for going beyond simple protesting to help their causes. Today’s young social entrepreneurs come across as more constructive than my generation of student activists, and more savvy about how to accomplish their goals cost-effectively.

Senator Chris Dodd has pushed for a requirement of 100 hours of public service in high school. There’s a risk that a mandate undermines the virtue, but on balance I’m in favor. Colleges should also emulate Princeton and encourage young people to take a “gap year” of public service abroad (I list a few possibilities for a gap year and for student activism on my blog, nytimes.com/ontheground).

Climate change has particularly galvanized high school students – perhaps because it’s their world that we’re cooking. A 16-year-old in San Francisco, Taylor Francis, has been speaking to groups around the country about global warming; after some training by Al Gore, he has set up his own Web site and is heading to China in June to give a dozen lectures there.

“There’s an enormous outpouring of young people who are trying to do community service,” Taylor said. “Unfortunately, a lot of that is probably just to get into college.”

These days, even some elementary children are getting involved. More than 2.5 million children participated in a drive on Club Penguin, a children’s activities Web site, that directed $1 million to charity.

In keeping with thousands of years of tradition, I should be wringing my hands about adolescents these days, so lazy and degenerate compared with my own upstanding generation. But when I see high school students working energetically to save the lives of people half a world away, before they are even allowed to buy a beer, I’m reduced to mumbling admiration. These kids are truly inspiring.

As a 16-year-old in Melbourne, Fla., Allyson Brown organized a Valentine’s dance at her high school, with the proceeds going to fight malaria in Africa. That dance grew into Stayin’ Alive, a campaign that has attracted more than 100 schools in 31 states to raise money to buy mosquito bed nets that cost $10 each and protect a family from malaria.

The aim of Stayin’ Alive, which is run by a group called Malaria No More, is to buy enough bed nets to protect two million children. Allyson, who remains very involved in the program, will have saved more lives as a student than many doctors save in a lifetime.

It’s true that some of the activism may have less to do with humanitarianism than with college applications. But even when greedy, self-absorbed cynics take on some worthy cause for the most selfish motives, they often learn and grow from the experience.

“I’ve seen some people who just want to bump up their résumés,” Allyson acknowledged. But she said that most participation seemed heartfelt – including that of a girl, about 7 years old, who ran a lemonade stand to buy bed nets for African kids.

“A lot of people say that teenagers aren’t thinking about the greater good,” Allyson added, just a hint of protest in her voice. “But when you give teens a chance to help, and they know their contributions will make a difference, then they help a lot.”

So maybe it’s time that we all learn from our juniors.

I invite you to comment on this column on my blog, www.nytimes.com/ontheground, and join me on Facebook at www.facebook.com/kristof.

“Women’s Work” is a festival designed to showcase women in the arts. Click here to view the schedule of performances. It promises to be a great celebration!

The Mission of TWTP is:

Bill Gates wrote an editorial that was published in today’s Asia Wall Street Journal:

‘Strategic Corporate Philanthropy’
By BILL GATES
FROM TODAY’S WALL STREET JOURNAL ASIA
May 8, 2008

How important is access to information technology? A World Bank report released earlier this year found a very high correlation between the rate of technology progress and income growth. It said: “Technological progress [distinguishes] fast-growing developing economies and slow growing ones. It also distinguishes economies that have made great strides in reducing poverty and those that have been less successful.”

At Microsoft, we share the belief that information technology can have a dramatic positive effect on people’s lives. We also believe that one of the best ways to accelerate the speed of technology adoption is through close partnerships between the public sector and the private sector.

Public-private partnerships make it possible to multiply the impact that a single organization or company could hope to achieve working alone. They combine public sector organizations’ knowledge of local communities with private companies’ technical expertise and implementation experience. As a result, these partnerships can develop and deploy effective information technology solutions that solve specific challenges with much greater speed.

The notion that businesses have a responsibility to promote the public good by supporting the work of nonprofit and governmental organizations is not new, of course. The late 1940s and early 1950s saw companies such as Ford, Western Electric and Philip Morris form foundations to manage corporate giving.

But much of this activity centered exclusively on financial support. Today, the value of corporate involvement lies as much in expertise as it does in monetary support. This shift is due in part to efforts by a number of United Nations agencies in the late 1990s to look for new ways to work with corporations to help address major global health issues.

The rise of this so-called “strategic corporate philanthropy” is an important step forward. When a company like Microsoft is in a position to provide not just money, but also the expertise and experience to help an organization use technology to achieve its goals more quickly and more effectively, it can speed the pace and scale of progress.

Take the United Nations Educational, Scientific and Cultural Organization’s program to create a set of global technology competency standards for teachers. The goal is to ensure that teachers have the training and materials to provide students with the technology skills they will need to participate in the global knowledge economy. Three major corporations — Microsoft, Intel and Cisco — helped shape the program, thanks to a shared belief that a technically literate workforce is an essential ingredient for sustainable economic growth.

Across Asia, public-private partnerships are playing an important role in creating new economic opportunities. In South Korea, the Ministry of Information and Communication has worked in close partnership with the private sector for nearly 15 years to build a national technology industry. Today, South Korea is a global leader in information and communications technologies.

The ultimate goal is to support the development of local economies that have the infrastructure and skilled work force needed to create sustainable growth. My hope is that this will help increase the number of people who have the tools and knowledge to participate in the digital revolution from one billion to two billion and beyond. As this happens and more people join the global knowledge economy, they will spur further innovations that address difficult issues faced by so many people around the world. This, more than anything, will be the key to creating a world where everyone can expect to lead long, healthy, productive and fulfilling lives.

Mr. Gates is chairman of Microsoft Corporation.

 

 

Released this morning from the Mayor’s Office:

PROGRAM TO AWARD NONPROFIT GRANTS FINALIZED
Metro funds to be awarded on merit basis

NASHVILLE, Tenn. – Mayor Karl Dean today announced a Community Enhancement Grant program has been put in place to ensure Metro funds for local nonprofits are awarded on a merit basis.

Nonprofit organizations meeting the criteria of the program can apply to receive funds beginning today. The application and complete grant program documents are available online at www.nashville.gov/finance/CEF.

Mayor Dean allocated $2 million to assist nonprofit organizations in the 2008-2009 operating budget he proposed to the Metro Council in March.

“We have a number of nonprofit agencies that offer vital services to our community, many of which government itself cannot provide and would not otherwise be available. This grant program will ensure that those are the services our resources support and that funding decisions are based on needs and results,” Mayor Dean said.

The program is directed at nonprofits that provide services in three critical areas: domestic violence, education and after-school care, and direct community services.

All applicants must attend one of two pre-application training meetings on May 15 and 16. Applications are due by May 28.

A funding review panel will make recommendations to the mayor and Metro Council. Grant award recipients will receive final approval when the operating budget is passed on or before June 30.

 This was also covered in the Nashville City Paper.