Massachusetts Nonprofits Feeling Strained by COVID-19 Outbreak

Today, the Massachusetts Nonprofit Network (MNN) and Philanthropy Massachusetts released findings from their survey of nonprofit organizations on the anticipated and real impacts of the novel coronavirus (COVID-19) outbreak in the state’s nonprofit sector.

The results from the survey—which received over 950 responses from nonprofits of all sizes, fields, and from all regions of the state—underscored the enormity of the impact of the COVID-19 outbreak on nonprofits’ essential operations, programs, and services. Full results of the survey can be found here.

63% of nonprofit respondents indicated that they were experiencing, or anticipated, a loss in their annual revenues. In addition, 52% of respondents characterized the severity of impacts related to the COVID-19 outbreak as “high” (defined as “significant disruptions”) and 43% characterized the severity as “moderate” (defined as “minor disruptions”).

“The results from the poll reinforce what many nonprofits have been sharing with us in recent days: they are already feeling strained by the coronavirus as employers, conveners, and service providers—and it’s only just beginning,” said Jim Klocke, CEO of MNN, and Jeff Poulos, CEO of Philanthropy Massachusetts in a joint statement.

Nonprofits indicated a range of specific impacts to their organizations. 89% of respondents reported the cancellations of programs or events, 67% reported disruptions of services to clients and communities, and 60% reported anticipated budgetary implications related to strains on the economy. Additional impacts on nonprofits included increased and sustained staff and volunteer absences (28%) and increased demand for services from clients and communities (25%).

Additionally, nonprofits responded that they are working to respond, or anticipated responding to the COVID-19 outbreak in the following ways: rescheduling or canceling programs or events (e.g. fundraisers) (92%), staying informed via news and updates from government agencies such as the Centers for Disease Control (91%), encouraging proper hygiene and cleaning procedures (89%), and encouraging sick employees to stay home (87%). 

Finally, nonprofits responded that they need financial relief, more information and best practices, and remote work/work from home support to weather the crisis.

Between the survey’s opening last Wednesday and its close yesterday, many nonprofits have closed offices, instituted work-from-home policies, or paused operations altogether. “In the time period when responses were being collected, employer behaviors and practices were rapidly changing in response to new information being released. It is likely that the impacts of the COVID-19 outbreak on nonprofits are now even higher than what was reported in the poll,” said Klocke and Poulos.

Klocke and Poulos reaffirmed their organizations’ commitment to working with nonprofit, philanthropic, and government leaders to mitigate the impacts of the COVID-19 outbreak on the Massachusetts nonprofit sector. 

“We look forward to a collaborative, cross-sector approach that mitigates the impacts of COVID-19 on nonprofits and the communities they serve,” said Klocke and Poulos. “Nonprofits are essential to the immediate responses to the COVID-19 outbreak, and will play outsized roles in rebuilding our communities in the long term.”

Nonprofits’ Response to COVID-19, and Policy Remedies

As first responders, service providers, and employers, nonprofits are contributing to and impacted by the coronavirus response efforts in a number of ways. Federal and state governments are in the process of developing policy remedies to address immediate needs and determine longer-term recovery needs. MNN is in communication with public officials to coordinate a cross-sector approach, and ensure that nonprofits are included in government mitigation and relief efforts. Specifically, MNN is working to ensure that any forthcoming policy remedies acknowledge the following:

Nonprofits are significant employers in the Commonwealth. 

  • Any employer-focused relief should make sure that tax credits and deductions are applicable to the taxes nonprofits pay, such as unrelated business income taxes and payroll taxes. 
  • Unemployment insurance measures should consider the fact that a number of nonprofit employees work at organizations that self-insure, and look to remedies that relieve the unanticipated burden on self-insured organizations. 

Nonprofits are front-line service providers and economic generators in their communities.

  • Direct-service organizations that shifted operations to respond to the crisis should be included in any public recovery funds.  
  • Economic stimulus proposals targeted at adversely affected industries should recognize the impact of the coronavirus on the broad array of closed nonprofit services.  

Nonprofits rely heavily on donations and government grants to execute missions.

  • Massachusetts has restored its state charitable deduction at a critical time: when charitable donations are down, and service demands are up. Preserving this incentive is vitally important.
  • Government agencies should adopt policies recognizing that a nonprofit may not fulfill its deliverable on a state contract due to the COVID-19 pandemic. In addition, state grantmaking agencies should consider temporarily loosening government-wide grant and contract reporting, application, and renewal requirements.

MNN will continue to provide updates through our newsletter and main coronavirus page with new developments. Nonprofits with questions or input on policies that would be beneficial to their organizations should contact MNN’s Director of Government Affairs Danielle Fleury.

MNN Applauds Philanthropic and Government Action to Mitigate Coronavirus Impacts

Philanthropies and governments across Massachusetts are setting up funds to support organizations and communities that have been impacted by the coronavirus. The Boston Foundation, the Community Foundation of Western Massachusetts, the United Way of Central Massachusetts, and the United Way of Greater New Bedford, and the United Way of Massachusetts Bay and Merrimack Valley have announced rapid-response funds.

In addition, the City of Boston is expected to announce today a fund to support families hardest hit by the crisis.

Links to these funds can be found at MNN’s coronavirus webpage here.

MNN released this statement today from CEO Jim Klocke:

“MNN thanks the government, philanthropic and community leaders across Massachusetts who are working to mitigate the impacts of the coronavirus on nonprofits and the communities they serve.

The coronavirus has obvious impacts on nonprofits’ abilities and capacities to carry out their important missions. MNN has heard from many nonprofits about the anticipated and real impacts on their daily operations. Some of the anticipated and real impacts on nonprofits include widespread cancellations of programs and events and the corresponding loss of revenue, disruptions of service to clients and communities, workforce-related matters like employee paid leave and unemployment insurance, and budgetary implications related to strains on the economy.

This year, nonprofits will need unrestricted dollars more than ever. Charitable donations, in particular gifts from individuals, have always been the most important part of nonprofits’ unrestricted budgets which allows them to maneuver with some flexibility in times like these and keep their operations afloat.

We are committed to working with our partners to help everyone in Massachusetts—particularly nonprofits and the communities they serve—weather the crisis.”

Our Shared Sector: Three Ways to Prepare for Successful Inclusion Strategies

By YW Boston

MNNSharedSector2020-min

YW Boston has been working to advance racial and gender equity and build more inclusive environments for over 150 years. Today, YW Boston’s InclusionBoston program has partnered with over 100 organizations to advance diversity, equity, and inclusion and create lasting cultural change. As part of this work, YW Boston partners with industry leaders to share insights and discuss successful strategies. We sat down with the Executive Director of The Urban Labs and EVP Chief Experience and Culture Officer at Berkshire Bank Malia Lazu to learn about her insights into how organizations can prepare for and successfully implement diversity and inclusion strategies.

Here are three implementation strategies for nonprofits from our conversation with Malia Lazu:

Don’t rush into action

Nonprofits are looking for lasting change, so they are eager to see results. It is important to remember that inclusive spaces are not built overnight. As Malia Lazu explained, “First you have to focus on building the relationships you need to get where you want to go. We need to build different kinds of relationships and that takes time.”

Hiring diverse candidates should not be the first step

First, focus on figuring out why you have not been able to attract and retain a diverse team. Malia highlights the importance of this prep work, “You want to do that internally. You don’t want to have folks telling on you on Twitter or Glassdoor.” This likely includes ensuring that you have equitable policies and have put effort into making sure all employees feel included. Learn more about the difference between diversity, equity, and inclusion in our previous article and how to work toward each here.

Encourage leaders and team members to work towards being better allies privately

When we talk about systemic change, we often forget that people make up systems. We are the product of systems and we all have work to do when it comes to deconstructing our personal biases and presumptions. Ally-ship is critical to the success of diversity and inclusion efforts. As Malia offered, “A good ally should read and educate themselves on as many diverse experiences as possible. Allow vulnerability and be open to it.” As the saying goes, ‘we don’t know what we don’t know’ and we should not expect others to do the work for us.

About YW Boston 

As the first YWCA in the nation, YW Boston has been at the forefront of advancing equity for over 150 years. Through our DE&I services—InclusionBoston and LeadBoston—as well as our advocacy work and youth programming, we help individuals and organizations change policies, practices, attitudes, and behaviors with a goal of creating more inclusive environments where women, people of color, and especially women of color can succeed.

Nonprofit 411: How Can Prospect Research Make a Difference for My Nonprofit?

Nonprofit 411 Roger Magnus-minBy Roger Magnus, Owner at Roger Magnus Research

OVERVIEW

Prospect or development research is useful for nonprofit philanthropic efforts but has its limitations. It involves conducting research and analysis to find out more about individual donors, foundations (private, community, and corporate), and government grants (not discussed here). Nonprofits vary greatly in their funding mix among these three major sources.

In particular, research may help to figure out more accurately how much money to ask for from donors or foundations. This is done by learning more about their potential philanthropic capacity based on estimated wealth /assets and giving history. Note that philanthropic capacity and how much to ask for are not the same thing as the latter is affected by other variables such as the relationship a donor has with your organization. A donor’s estimated wealth range is usually gleaned from data about this person’s real estate, charitable contributions, and current employment (if salary is known or can be estimated for groups such as public company and nonprofit top executives and directors, government employees, celebrities, and business owners). Some donors have additional wealth factors such as serving on a family foundation, owning a plane or yacht, or being an “insider” holding public company stock as an executive, director, or large shareholder. Research can also find business or volunteer relationships between a donor or foundation and your nonprofit’s employees/board as well as a donor’s biographical information, interests/hobbies, employment history, giving philosophy, and even potential conflicts of interest that may cause your nonprofit to stop requesting or accepting money from this donor. The findings will normally be analyzed and summarized in a donor or foundation profile which can vary in length, detail, and sequence.

Some variables that research CANNOT find include anonymous donors, a donor’s bank account balance or credit history, many donors’ exact salaries or stock holdings, and, if they own a Donor Advised Fund, its assets and donations.

RESOURCES

Finding this information may be aided by having access to subscription databases such as LexisNexis, DonorSearch, IWave, Foundation Directory Online, and many others.

Below are some additional FREE websites that may also be helpful:

  • CHARITABLE CONTRIBUTIONS – DS Giving Search Tool (DonorSearch) – dsgiving.com/ – Searches charitable and political gifts by name and state.
  • EMPLOYMNENT SALARY DATA
    • FederalPay.Org – Federal government employee salary data.
    • Nonprofit 990 forms (see below).
    • Securities and Exchange Commission (SEC) – sec.gov – Search forms DEF 14A, 3,4, and 5, 13 for executive, board member, and large shareholders salaries/stock holdings.
  • NONPROFITS/FOUNDATIONS –
  • REAL ESTATE VALUATIONS
    • Tax assessor Database – pulawski.net/ – A listing of various local tax assessor sites broken down by states. Some links may be incorrect, and if so try a Google search on that assessor site to find updated Web address.
    • Zillow.com – Search by address, city, or zip
  • RELATIONSHIPS -LittleSis – littlesis.org
  • VARIOUS – Wealth Open Data Dashboard – sgrimes.shinyapps.io/WealthDashboard/ – Helpful lists (Billionaires, political giving, SEC insiders, Doctors and Dentists, etc. ) useful for donor research

The Restoration of Massachusetts’ State Charitable Tax Deduction

by Danielle Fleury, Director of Government Affairs

As of January 1, 2020, Massachusetts has met statutory triggers and has restored the state charitable tax deduction. The restoration comes 20 years after a state-level tax benefit for charitable giving was passed by voters with a 67% yes vote. Of the 43 states that have an income tax, 32 (74%) have a state/local charitable tax incentive. Here is some history on Massachusetts’ version of a state-level deduction, and why it matters now.

What will it do?

  • The state charitable tax deduction will enable taxpayers to claim a deduction on their state income tax for charitable donations made throughout the tax year. The deduction will create a tax incentive for giving that is available to taxpayers regardless of whether they itemize, and will first be available for donations made in calendar year 2021.

What are the key benefits?

  • For the people served by nonprofits: A state-level incentive will bolster charitable giving at a time when the people served by nonprofits need it the most. Charitable giving is the lifeblood of the nonprofit sector, and individual donations are particularly important, making up almost 70% of the total charitable contributions upon which nonprofits rely to accomplish their important missions.
  • For taxpayers: Taxpayers across the income spectrum give, and low and middle-income earners give at substantial rates. The vast majority of Massachusetts residents who will benefit from the state charitable deduction are low- or middle-income earners. Over 150,000 of them earn less than $50,000 per year, and 300,000 of them earn between $50,000 and $100,000.
  • For the Commonwealth: Nonprofits are an economic engine, and employ almost 18% of the Commonwealth’s workforce. Charitable giving goes almost exclusively to the delivery of critical services. Nonprofits frequently provide programmatic services for individuals that would otherwise look to government, often at a cost lower than comparable public services.

Why does this matter right now?

  • Individual giving is on the decline and it needs a boost. The 2017 federal tax reform package (The Tax Cuts and Jobs Act) changed the way that taxpayers file their federal taxes. Far fewer taxpayers itemize, and therefore fewer taxpayers realize a federal tax benefit from charitable giving.

What needs to be done?

  • The Governor’s FY21 budget assumes restoration of the deduction, and the House and Senate budgets should follow suit to preserve this benefit. Legislators should leave the state charitable tax deduction intact in adherence to the will of the voters, in accordance with long-standing statute, and as a safeguard against the harmful impacts of federal tax reform and other pressing demands upon the nonprofit sector.

With question or for more information on the state charitable tax deduction, please contact MNN’s Director of Government Affairs Danielle Fleury.

Member Spotlight: Brookview House

Member Spotlight Brookview House

Children in Brookview House’s Above and Beyond Program.

Oftentimes, a nonprofit’s clients are the best spokespeople for the organization. This is the case with Brookview House, a Dorchester-based nonprofit. Their mission is to provide women and children experiencing homelessness with safe, supportive housing, including programs on site to confront the root causes of homelessness and transform lives.

Here is what one former client of Brookview House had to say:

“A few years ago, I was a homeless mother with three children and realized that hotels, motels and shelters were not going to get us out of our situation. We needed additional support to help me get training and secure a job, and my kids the educational and emotional support they needed – and that’s what Brookview House does for families.

We were able to go out on our own after six months at Brookview. Because I loved it there so much (everyone there becomes family) and I was so grateful for what the organization had done for me and my children, I volunteered there to help others who were going through exactly what I had went through. As time went on, I was eventually hired at Brookview and created their Housing Program Department to assist residents ready to go out on their own find the right home.

Because of my experience at Brookview, I am now working as a Property Manager for a large property management firm near Boston, and my children are all thriving in life. With all my heart I thank all of the wonderful people and programs at Brookview.”

Light of Dawnn Awards with Governor Charlie Baker Shine Light on Community Heroes in Memory of Youth Worker

Light of Dawnn 2020-145-min-min

Nonprofit leaders, government officials, and community members came together at the West End House Boys and Girls Club on Tuesday for the sixth annual Light of Dawnn Awards Ceremony to honor the life of Dawnn Ashley Jaffier. Three front-line nonprofit professionals and three high school seniors who embody Dawnn’s legacy were recognized for their service to their communities.

Massachusetts Governor Charlie Baker delivered remarks at the ceremony.

“Our administration is grateful for the West End Boys and Girls Club’s dedication to the continued celebration of Dawnn’s life and service,” said Governor Charlie Baker. “Congratulations to this year’s award and scholarship recipients, each of whom exemplify Dawnn’s compassion, leadership, and kindness.”

The Light of Dawnn Awards were created to honor the memory of Dawnn Jaffier, who was killed on August 23, 2014, while on her way to a neighborhood celebration. At 26 years old, Dawnn had made a significant impact in her community through her work at nonprofits, including the West End House, Playworks, City Year, and the Boys and Girls Clubs of Boston.

After Dawnn’s death, her family, friends, and colleagues came together to create the Light of Dawnn Awards to honor Dawnn’s legacy of compassion and service. The Awards aim to raise the public profiles of nonprofit workers doing important direct-service work, particularly those who do not have prominent or externally-facing roles.

Every year, three direct-service nonprofit professionals are selected to receive a Light of Dawnn Award and a $5,000 cash prize. The Awards are presented by the Highland Street Foundation and the Kraft family and managed by the Massachusetts Nonprofit Network.

This year’s awardees are Shantell Jeter, Physical Education Teacher at Boston Green Academy; Aspen Eberhardt, Operations Director at Greater Boston PFLAG; and Isabel Villela, Case Manager at La Alianza Hispana.

“It is an honor to recognize Shantell, Aspen, and Isabel for their outstanding contributions to our community,” said Blake Jordan, Executive Director of the Highland Street Foundation. “Just like Dawnn, these individuals quietly go about their work every day driven by a desire to make a difference in someone’s life.”

“We are pleased to celebrate Dawnn’s spirit and legacy by honoring this year’s outstanding Light of Dawnn Award recipients,” said Jim Ayres, chair of the Massachusetts Nonprofit Network’s board of directors. “Shantell, Aspen, and Isabel are outstanding examples of the hundreds of thousands of nonprofit professionals across Massachusetts that work to make our communities stronger.”

In addition, three high school seniors were awarded the Light of Dawnn Scholarships for their community work. Now in their fifth year, the scholarships were created by John Hancock, where Dawnn’s mother is a longtime employee, and the Foundation To Be Named Later. Scholarships of $5,000 are given to each recipient for higher education.

This year’s scholarship recipients are Aleena Mangham and Lesley Carranza of the West End House Boys and Girls Club and Erika Yamilet Garcia of Beacon Academy.

“We are honored to once again join Dawnn’s family, and our community partners, to pay tribute to her extraordinary life and legacy,” said Tom Crohan, VP & Counsel, Corporate Responsibility and Government Relations, John Hancock. “Aleena, Lesley, and Erika exemplify Dawnn’s commitment to community service, and we hope their awards make the decision to attend college a little easier.”

Why Inclusive Nonprofits Should Consider a “Culture Add” Over a “Culture Fit”

By YW Boston

MNNCultureAddvCultureFit-min

When nonprofits interview a potential employee, they are not just looking at their skills and past experiences. Often, teams look for a sense of how an interviewee would work with existing staff and whether they hold the values of the organization. This evaluation is often branded as a search for a “culture fit” – as in, “Does this person fit into the existing culture of our organization?”

Forbes recommends looking for “culture fit” candidates because, as they explain, “we can always provide the resources and tools to help employees get better at their jobs, but we can’t teach someone to align with our cultural values.” Each organization has their own language, processes, and customs. Many people believe that a new employee who is a “fit” will be easily onboarded into this culture, leading to increased employee satisfaction and reduced employee turnover.

“Culture Fit” is flawed

A number of sources that speak of “culture fit,” such as Forbes and Business News Daily, recognize that the concept can be harmful if employed incorrectly. As Forbes explains, “What it doesn’t mean is overlooking different cultures and lifestyles, or dismissing personal values you don’t agree with.” However, when a hiring team becomes very focused on cultural fit, they will be more likely to hire those who are familiar to them. Even if unconsciously, hiring teams make judgements based on who they believe would be the easiest to train or get to know, often choosing those similar to them.

“Culture Fit” may be hurting your organization

With each individual hire, these trends may not be obvious, but they build over time. This leads to a lack of diversity within an organization, which can stifle its success. As McKinsey & Company reported in Diversity Matters, companies in the top quartile for gender diversity are 21% more likely to outperform those in the bottom quartile. Those in the top quartile for racial diversity are 33% more likely to outperform. Their research demonstrates that hiring bias’s effect on office diversity has large ramifications. A homogenous workplace culture (whether it be homogenous on racial, gender, or experience) can lead to groupthink and the team may have a more difficult time finding solutions.

Instead, focus on “Culture Add”

All of this is not to say that hiring committees should get rid of any attempts to examine how a candidate may work with the organization’s culture. Rather than “culture fit,” consider seeking someone who would be a “culture add” to the workplace. As Beamery explains it, “culture add” requires asking: “What can a candidate bring to the table that will add to your culture and help move it in the right direction?” Focusing on hiring a “culture add” reorients the task by asking your hiring team to perform pre-work that will set you up for success. Before hiring a new candidate, the team should examine: What perspectives are we missing from our work? Where are we looking to grow as an organization? Then, after accepting that employees can and should help your nonprofit’s culture evolve, there must be processes in place to allow this to happen. This means fostering an inclusive workplace where employees are recognized for the unique perspectives and skills they bring to the work.

About YW Boston

As the first YWCA in the nation, YW Boston has been at the forefront of advancing equity for over 150 years. Through our DE&I services—InclusionBoston and LeadBoston—as well as our advocacy work and youth programming, we help individuals and organizations change policies, practices, attitudes, and behaviors with a goal of creating more inclusive environments where women, people of color, and especially women of color can succeed.

Nonprofit 411: 15 Governance Best Practices for Nonprofit Boards

By Greg Rogers, Senior Audit Manager at Kevin P. Martin & Associates, P.C.

Individuals choose to get involved with nonprofit boards for a variety of reasons such as a passion for a charity’s mission, a desire to give back, a commitment to enhance one’s experience, or a pursuit of new business opportunities. Whatever the reason, those individuals frequently do not fully understand their fiduciary responsibilities when they volunteer to serve on a nonprofit board.

Nonprofit board members play a vital role in the philanthropic landscape of society – they are tasked with a duty of care and a duty of loyalty as stewards of funds raised for public benefit. Boards must exercise prudent decision-making and do what is best for the organization to preserve the integrity of the nonprofit. To this end, every nonprofit board should consider these 15 governance best practices:

  1. Boards should meet at least three times per year with no more than one of those meetings held via conference call (if board members’ locations allow).
  2. Every board should have a minimum of five voting members. Ideally, no more than one voting board member should be compensated.
  3. Term limits should be set to promote board member engagement and board effectiveness.
  4. All boards should establish a nominating committee charged with recruiting directors that are diverse and passionately committed to serving the charity’s mission.
  5. Boards should establish an audit committee tasked with hiring a CPA firm and communicating with its CPA firm on an ongoing basis to ensure all financial reporting matters warranting concern are address in a timely manner.
  6. Boards should regularly evaluate the performance of the executive director and set his/her compensation annually through an objective analysis.
  7. Board members should attend board meetings and meetings of subcommittees they sit on to ensure they can make informed decisions about all matters requiring board votes.
  8. All board members should disclose conflicts of interest at least annually. Boards should verify that conflicts of interest between the charity and a board member or a member of management are not material.
  9. Boards should ensure an orientation process is in place for new directors.
  10. Board members should work with management to ensure adequate internal controls over financial reporting are in place, including a segregation of duties to promote accurate financial reporting and mitigate fraud risk.
  11. Nonprofit boards should approve the organization’s budget prior to the beginning of the fiscal year and continuously monitor budget versus actual results throughout the year.
  12. Nonprofit boards should approve the annual audit, including the financial statements and any other reports discussing internal control matters or comments for management consideration.
  13. Nonprofit boards should ensure the IRS Form 990 is reviewed and approved by the full board.
  14. Nonprofit boards should ensure all governance policies recommended by the IRS are formally adopted by the board.
  15. Boards should take measures to minimize the personal liability of directors in the event of organizational insolvency.