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Bobby Thalhimer
March 21, 2009 9:46 AM
Since the Richmond Times-Dispatch put a nice promo about my blog on its editorial page, at least four or five people have said to me, “I don’t know how you do all the things that you do.” I have thought about that observation, and if I am truthful I really don’t do all the things that I do! Not anywhere close.
My many colleagues at work effort tirelessly to achieve accomplishments for which others give me credit. My wife, my kids and my extended family and I work together in the same way. Sometimes I am fortunate to provide leadership, but rarely have I done the heavy lifting. And, if I really want to be honest, a great deal of what I know is thanks to my dad and to my mom, who as I write is quite ill. Daily, when I visit Mom she provides me a mental list of things I should be thinking about! All of these people are my heroes.
Paul Galanti is a hero to many of us, thanks to his long-term survival as a POW in Viet Nam. His wife, Phyllis, is equally a hero for her extensive, tireless efforts, along with other POW wives, to rally the nation in support. These women were instrumental in saving our heroes, including Paul and John McCain. Paul never forgets it, and in fact gives a magnificent talk called, “Who Packs Your Parachute?” The point is that the person who packs your parachute is the most important person in the whole world.
I suppose there are three kinds of people in this world – those that don’t do very much, those who try to do everything by themselves (and often make a lot of fuss about it), and those who are team players (and probably don’t make a lot of fuss). I hope I am one of the latter people most of the time, and I thank all of you who give me credit for the work of a great and very large team. Let me take this opportunity to pass your kudos along to my family, my colleagues and my friends, because they are the ones who deserve it.
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RSS 2.0Bobby Thalhimer
March 14, 2009 9:32 AM
I am a big fan of gift agreements. It is amazing to me how many gifts donors make without laying out the parameters of what is expected from the recipient charity. For example, a charity begins a capital campaign for a building. The campaign falls short, and the charity decides not to build the building. What happens to the donor’s gift?
A gift agreement would solve that problem. The major universities often use gift agreements that give them the right to redirect the funds to other projects. While this provision may be in the fine print, at least the contingency plan is disclosed.
Smaller nonprofits generally don’t use gift agreements, and in my view it is the donor who is most exposed. I remember from my banking days a saying that “possession is nine tenths of the law,” which normally turns out to be true because litigating can cost more than the value of the gift!
Thanks in part to the recession, in part to a lack of clarity and in part to some charities’ disregard for a donor’s intent, we are seeing some tragedies around long term gifts today. Witness Princeton University’s recent settlement ($100 million price tag) with the Robertson family, who complained that the University is misspending their parents’ gift that was intended to train college graduates to enter government service. The family observed that only one or two Princeton graduates each year in fact enter government service, and they alleged that certain expenditures from the endowment were used for other purposes. Other controversies include Randolph College’s sale of donated artwork and the decision of Brandeis University to close its museum and sell its 6,000-piece collection. These donors, some living and others not, are most certainly unhappy.
Sometimes nonprofits do the right thing on their own. Recently a local nonprofit returned a gift to a donor. Some years ago the donor had made a naming contribution (in memory of a loved one) for a new facility, which was never constructed because the balance of the money needed was never raised.
Sometimes nonprofits resist doing the right thing. The Community Foundation has a donor who made a direct gift to small nonprofit, which admits that it is not going to follow through on the intended purpose. Nevertheless, they are resisting the donor’s request to transfer the funds to another nonprofit. Wouldn’t it have been simple to have a gift agreement saying what would happen if the purpose of the gift could not be fulfilled?
An alternative solution is to use a third party, like The Community Foundation, which can receive the gift under its own gift agreement (which we call a fund agreement) and release the proceeds to the nonprofit when certain benchmarks are met. I personally used the foundation in this way in 1992 (seven years before I began working there) to set up a charitable remainder trust benefiting a local nonprofit. Since I planned to live a long time (and so far have), I figured there was some chance the nonprofit may no longer be in existence and The Community Foundation could redirect the funds if necessary.
The lesson here is that when givers make endowment gifts or other long term gifts to nonprofits, they need to think critically about how their gift will be used and whether they have ensured that the nonprofit will follow through. Let’s face it, over eternity (the expected life span of endowments) the probability of any idea becoming irrelevant or impractical increases significantly. Once you have forked over the dough, it is too late to place restrictions on it.
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Bobby Thalhimer
March 06, 2009 10:00 AM
I had coffee recently with 155 nonprofits leaders in the Richmond region who are seeking sustainability during these tough times. Our host was the University of Richmond’s Institute on Philanthropy (http://scs.richmond.edu/philanthropy). Wally Stettinius, who has personally coached half the people in the room, moderated a panel with Bill Roberts (executive director of the Robins Foundation (http://www.robinsfdn.org/), Karen Stanley (executive director of the shelter, CARITAS (http://www.caritasshelter.org) and me (http://www.tcfrichmond.org).
Words of wisdom flowed from my colleagues. Bill Roberts observed that some nonprofits try to insulate themselves from change, which in the long run becomes the greatest risk to sustainability. Peoples’ needs change, market realities change, and nonprofits also need to embrace change in order to stay relevant. Financial stability is needed not to ward off change, but to facilitate it.
Karen Stanley told the story of how CARITAS has embraced change, and how it hasn’t always been easy. She oozed energy and confidence as she described how CARITAS has evolved and broadened its mission as a shelter, which once operated only in winter and was housed in various congregations within the Richmond region. Each step along the way, CARITAS sustained “board casualties,” as those members who were unwilling to change dropped away and new visionaries grabbed the reins of leadership. Today, CARITAS operates a year-round shelter involving 170 faith communities, occupies its own building and incorporates a furniture donation facility to assist homeless people moving into housing. CARITAS entered into a strategic alliance with The Healing Place, a recovery facility for addicted homeless men which shares Karen’s services as its executive director. In the future, Karen envisions a merger of CARITAS and The Healing Place, the addition of a recovery facility for addicted homeless women, the creation of a for-profit employment agency to help recovered men and women get back into the workforce. Whew!
Should your nonprofit follow the urge to merge? Here are some questions that can guide your thought process. Does your nonprofit’s mission fit the needs of the marketplace today? Are some parts of the mission more important to the community than others? Are there some parts of your mission that you should let go? Who else is operating in your space? What efficiencies, such as reducing duplicative back office operations or reducing the cost of executive leadership (a la Karen Stanley), might you gain through a strategic alliance or a merger? What extensions of your operations might enhance your mission and increase revenue, either contributed or generated through fees and other sales?
Is your nonprofit sustainable? Do you have the right people on your board and staff to be successful should your mission evolve in new ways? Do you rotate board members and nurture a team of staff, volunteers and donors that will survive the loss of any one individual? Do you capture and record the information that will inform those who will succeed you?
For help in exploring these questions, you may contact The Community Foundation (http://www.tcfrichmond.org). The Foundation may be able to help with endowment stewardship, technical assistance through the Partnership for Nonprofit Excellence or funding to facilitate positive change.
The urge to merge has never been stronger, as nonprofits deal with revenue shortfalls, tighter budgets and increased demand for services. Those that survive this crunch will be the ones that embrace change, sharpen their mission, attract the best talent, develop a broad base of generated and contributed revenues, and remain attuned to the needs of the ever-changing marketplace.
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