Nonprofit 411: Is a Cause Marketing Campaign Right for Your Nonprofit?

Nonprofit 411: Is a Cause Marketing Campaign Right for Your Nonprofit?

By Ellen Lubell, Attorney-at-Law, Tennant Lubell, LLC

Cause marketing campaigns – also referred to as “charitable sales promotions” and “commercial co-venturer campaigns” – are mutually beneficial collaborations between a for-profit business and a nonprofit charity to increase recognition of the nonprofit’s name and cause, and to generate goodwill for the business because of its association with the nonprofit. It may also generate revenues for the nonprofit and profits for the business.e-lubell-photo

Cause marketing has been around since the mid-1970s. For example, the “Buy One Give One” campaigns involving businesses such as Toms Shoes guarantee that social or environmental good will be done through their charitable partners each time a shopper purchases their products. General Mills and the American Heart Association (AHA) teamed up to give a “heart check” stamp of approval to products such as Cheerios to certify that these products meet certain nutritional standards, thus advancing AHA’s educational mission and promoting sales of General Mills products.

Since cause marketing is intended to have an impact on the success or failure of the nonprofits involved, state charity regulators —typically Attorney General offices—scrutinize these campaigns to assure that nonprofits’ assets are being used appropriately and are not unduly benefiting private businesses.

If you are contemplating a cause marketing campaign for your organization, questions you should ask include:

1. Is the business partner you’re considering likely to be trustworthy and aligned with your interests?

Due diligence is important. Check out your partner’s financial and legal health; investigate its management practices and reputation; find out its record on issues relevant to your mission and ensure that their practices will not prove to be embarrassing; and make certain that you are compatible.

2. Are there risks to the use of your name and logo? The primary resource a nonprofit has to offer to a campaign may be its name. Permitting use of your name may seem like a no-brainer, but consider that the excellence and goodwill it represents—which your organization has developed over time with substantial effort—is exactly what your business partner wants to associate with its brand. If your business partner thinks your name is valuable in the marketplace, so should you. Consider also that the loss of your good name can be extremely costly. If your partner’s products or services become associated with fraud or greed or carcinogens, then so may your organization.

3. Will the campaign require you to undertake activities that will divert you from your nonprofit mission? Consider whether you will need to use your resources and staff in ways that are a greater benefit to your business partner than to you.

4. Are there legal compliance requirements associated with the campaign? Massachusetts charitable solicitation laws require you and your business partner to register with the Attorney General prior to commencement of the campaign, to file a written contract setting forth the terms of the campaign, and to prepare and maintain final accountings to demonstrate compliance with regulations. Make sure your partner understands that transparency and regulators are the norm in the nonprofit world, that limits will be placed on the way it can promote its brand, and that you will need to approve promotional materials that bear your name.

Is a cause marketing campaign right for your nonprofit? Engage your organization’s Board and senior staff and make sure the campaign will advance your mission.

Nonprofit 411: Safeguarding Against Fraud at a Not-for-Profit Organization

Safeguarding Against Fraud at a Not-for-Profit Organization

By Barbara Andrews, CPA, Senior Audit Manager, Kevin P. Martin & Associates, P.C.

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Not everyone believes that fraud can happen at their organization.  You know your employees and you have shared professional and personal milestones.  However, the reality is that fraud does happen, and it could happen to your organization.  A 2016 Global Fraud Study issued by the Association of Certified Fraud Examiners (ACFE) reported that the median loss for a Not-for-Profit organization was $100,000.  For a small not-for-profit organization this is a huge hit to the bottom line and most likely a bigger hit to the organization’s reputation.  The cost of fraud is much more than stolen money, a stolen identity or the misreporting of financial statement information.  It can cost the organization future funding plus the time and effort expended by employees and the Board to repair the organization’s reputation.

An organization’s control environment is the first line of defense against fraud.  When developing internal controls, an organization’s policies typically focus on the major transaction cycles and the areas of information technology/general computer controls, compliance and financial close/reporting.  The size of an organization doesn’t matter.  The effectiveness of the policies in place to mitigate identified risks is what matters.

An organization’s internal control policies and procedures should be written and made available to all employees.  A whistleblower policy should be adopted and employees should be provided with clear instructions on how to report suspected fraudulent activity.

Don’t let the internal control policies collect dust!  Just as an unsupervised employee has a higher risk of committing fraud, stale internal control procedures minimize an organization’s ability to detect and prevent fraudulent activity.  It is essential that the policies and procedures be assessed for risk at a regular basis.  The review requirement could be triggered by a change in environment such as a new program, key staffing change or compliance requirements.   There should also be an annual review that focuses on the “what could go wrong” scenarios and the determination of whether the controls are adequate to safeguard against fraud.

Is your organization’s technology environment secure or is it vulnerable to a breach?  The internal control environment should also consider and address cybersecurity risks.  A cyberattack can impact the organization, its employees and the clients that are being served.  Identity theft is a legitimate threat that should be assessed and addressed.  The Commonwealth of Massachusetts has adopted privacy laws to protect personal information and an organization’s control environment should incorporate the provisions of the privacy laws.  A regularly scheduled risk assessment by a qualified IT professional may help to reduce the organization’s exposure to risk in this area.

In summary, as a safeguard against fraud, an organization should design, implement, communicate and monitor its internal control system to determine that the system is functioning as designed.  An organization’s internal control system should be thought of as a living breathing document.   To be effective, it needs to change with an organization, whether it be due to a change in key personnel, billing system or a merger.  The Board should monitor the organization’s internal control procedures and assessments.  To assist with its monitoring function, an organization may want to engage a third party to perform a fraud prevention assessment.  This assessment includes an assessment of the entity’s information technology/general computer program controls and is designed to highlight possible weaknesses in the internal control structure.

Nonprofit 411: How Decision Tools Can Help Nonprofit Leaders

Jay W Vogt and Judy A Ozbun

judy-and-jayFounders of EssentialWorth

You’re facing a tough decision, and you’re stuck.  You’d love some perspective, but you don’t know how to get it.  If only you could see your situation in a new way.

Here’s how we often gain perspective on tough decisions.  First we take a step back, and try to see the big picture.  Often choices are hard because they bring together two competing and compelling interests, in a dynamic tension, pulling you in different directions.  Seeing this tension as creative helps us map the landscape of a challenge, and place our specific choice in its general context.  In seeing that context, we often experience insight, and then our decision is made.

Here’s an example of how it works.  Let’s say you have to make choices regarding which programs you keep, which you grow, which you add, and which you drop.  The competing and compelling interests are mission and revenues.  Some programs are closer to the mission core than others.  Some programs attract more revenues than others.   Thinking about your programs holistically – in this context – means seeing how your program and revenue strategy fit together as a whole, in a sustainable portfolio.  That perspective tells you whether the one you’re considering is a fit, or a misfit.

If you are a visual learner, it helps to map out this tension graphically, as an x and y axis in creative tension.  Thus we would map the prior example in this way:

 

 

Low Mission

 

High Mission
High Revenues low mission

high revenues

high mission

high revenues

Low Revenues low mission

low revenues

high mission

low revenues

 

Seen this way, the insights are immediate.

 

 

Low Mission

 

High Mission
High Revenues grow sparingly to subsidize grow aggressively
Low Revenues divest or joint venture the heart and soul of the agency

 

We love these two-by-two cell matrices.  They are simple yet powerful tools.  They help individuals make decisions.  And they help teams frame choices for discussion.  We love the insights they generate.  We introduce a series of graphic decision tools – in this format – online through short videos at our YouTube channel, EssentialWorth Moments.  They only take a moment; and they’re essential!

 

We would love to hear from you:

  • What other decisions are you wrestling with at the moment?
  • What decision frameworks have you used recently to make an important decision?

2016 Conference: A Day of Moving Forward

2016 MNN Annual Conference: Moving Forward for a Better Commonwealth

mnn-conference-2016-03-1On November 2, 2016, 600 nonprofit leaders and business professionals gathered for a day of sharing, learning, and networking at MNN’s annual conference Moving Forward for a Better Commonwealth. This year’s conference focused on what it would take for the nonprofit sector to move forward in an ever-evolving social, economic, and political climate. Professionals representing every sub-sector and from every career level came together to draw upon the collective expertise of the entire sector.

The day began as attendees filled the halls outside the ballroom, which were lined with exhibitor tables. Fifty exhibitors featured  a variety of products and services, from technology and advocacy to banking and fundraising. The excitement was palpable as business cards were exchanged, and connections were built that would last beyond that day.

The morning event kicked off as Jim Klocke, MNN’s CEO, welcomed attendees to the event and offered encouragement. “You face big challenges every day,” Jim said. “Internal, external, and a lot of both on the hardest days. We have been reminded before, and we do well to remember today, that there is value in taking on these hard challenges.” Jim went on to remind those assembled that, in spite of these challenges, or perhaps because of them,  Massachusetts remains poised to lead with its vibrant and engaged nonprofit sector. During the morning program, we also heard from Dr. Gururaj “Desh” Deshpande, seasoned entrepreneur and keynote speaker, who offered his perspective on the ways in which Massachusetts nonprofits could continue to move forward. Desh praised the Massachusetts nonprofit sector, saying that “Massachusetts is the capital of the world in nonprofit, both in quality and quantity.”

Throughout the day, there were three workshop breakout sessions where attendees could choose between 31-expert led workshops. The presenters covered a variety of topics, such as proper fundraising techniques, how to tell a brand story, what it means for diversity and inclusion to be the cornerstone of an organization, and so much more. A glance into any of these workshops revealed rapt audiences, knowledgeable speakers, and an atmosphere of engagement and learning.

During the lunchtime program, MNN announced its  2016 Lifetime Achievement Award winners, Deborah Cary of Mass Audubon and Michael Maso of the Huntington Theatre Company, both of whom, in their respective fields, have dedicated their careers to improving and strengthening the Commonwealth.

Deborah Cary, who has worked with Mass Audubon for the past 31 years, shared her tips for getting things done, which not only included the practical advice to stretch everyday, get more sleep, and take walks in the park, but also to share credit, be inclusive, thank people, and always remain positive even in the face of adversity. “Look for the good and let the rest die of neglect,” Deb advised. 

In his acceptance speech, after assuring his audience that he could not get anyone tickets to Hamilton, Michael Maso also spoke of the importance of positivity in the face of adversity, particularly in today’s charged cultural and political climate.  “Empathy is the theater’s great gift and most important product,” Michael said. This empathy and positivity allowed Michael and the Huntington Theatre to negotiate with developers to save their principal theater from destruction and protect it for the next 99 years.
In closing, Jim Klocke praised those gathered for helping to build a network of nonprofits that strengthened the Massachusetts community as a whole. “Our greatest strength as a network is the commitment, creativity, and character you all bring to your work every day,” Jim said, “We want to do everything we can to help advance your work, and in the process make Massachusetts a truer Commonwealth.”

Thank you to our conference sponsors who have made tremendous commitments to strengthening the state’s nonprofit community. A special thank you to our Leadership sponsor Appleton Partners, our Workshop sponsor Cambridge Savings Bank, and our Luncheon sponsor Comcast. In addition, we want to thank everyone who attended our 2016 conference. Our conferences would not be what it is without your energy, support, and commitment to working together to move the Commonwealth forward.

Nonprofit 411: Sherlock Holmes Meets Major Gift Fundraising

By Diane Remin, President, MajorDonors.com

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You asked for a gift. The donor replied, “Let me think about it.”

Don’t negotiate against yourself.

You’ve just presented a donor with a significant opportunity—whatever that means for your organization. You’ve done your homework. You’re optimistic. But expecting an immediate “yes” is not realistic.

“Let me think about it” is a perfectly natural response. Resist the temptation to jump into negotiations or end the visit without learning more.

Be Sherlock Holmes

You want to better understand what the donor is thinking.   It may be about the amount – but it also may be the timing or even something about the project, itself.  Project/program, amount and timing encompass much of the possible terrain.  It is also possible that “Let me think about it” is a brush-off.  If it is, you want to know that, too.  And by exploring further, you are likely to find out.

The technique is project/program, amount, timing (P.A.T.) PAT yourself on the back to remember it!

Step 1:  Acknowledge the reply:  “I understand you want to think about this opportunity, Susan.”

Step 2:  Project/Program: Confirm that the donor is on board with the project/program. If the donor does not think the opportunity makes sense, game over.  That said, it is unlikely that you have arrived at this point only to discover a lack of enthusiasm.  Most of the time, your yes/no question about the project/program will have returned the donor to “yes” mode.

Step 3:  Amount: Does the amount reflect the type of difference the donor would like to make with this particular opportunity, e.g., “I understand you would like to think it over, Susan, but I’d like to confirm that $25,000/year for four years is the kind of impact you would like to have once you’ve given it some thought.”

  • You are listening for any form of “yes, I just need to think it over” (or talk to my spouse, accountant, etc.). With a “yes,” move to step 5 unless timing issues have been raised.
  • Only negotiate if you get an absolute “no,” i.e., “There is no way we can/will do $25,000/year.”

Step 4:  Timing: Timing issues sound like, “My daughter is getting married, I have two kids in college, I have other commitments, etc.”

  • You can try delaying the start date or scaling the gift so that the payments start small and grow over time. If that doesn’t work, get permission to keep the donor updated and return in the future.

Step 5:  Do not leave without permission for the next step.

  • Propose an in-person follow-up visit so you can be there in-person to answer any questions that may arise..
  • If the donor rejects an in-person follow-up, come to agreement on a time for a follow-up phone call.

Note: If the donor won’t agree to a specific time for follow-up, you may be getting the brush-off.

Summary:  Continue the conversation when a donor says, “Let me think about it.”  Your job is to learn more about what is on the donor’s mind. Is it the project, the amount, and/or the timing that is keeping him/her from taking action right now?  Solve the issue if you can (it may be that the donor simply needs to think about it—which is fine).  Leave with a permission-based next step.

Nonprofit 411: If You Build It, They May Not Come – Non-Technical Considerations When Planning your Knowledge Management Initiative

By Kevin Palmer, Chief Operating Officer, Annkissam

2 - Knowledge Management for Small Nonprofits - Kevin Palmer

Congratulations! You were given the responsibility to overhaul your organization’s approach to knowledge management (KM), including choosing a new tool or system. Several months into the process you make the decision to invest in purchasing a new KM system. You have spent countless hours documenting your exact data needs, working with implementation specialists and, perhaps, engaging a consultant or two to adjust the tool to meet your needs. You have focused nearly exclusively on ensuring the right tool was selected and customized. However, a few weeks after the new system goes live, almost no one at your organization is using it. What happened?

It can be deceptively easy to think that, once you find the right tool, everyone in your organization will see the intrinsic value in posting their information and content. The reality can sometimes be that, without getting buy-in across the organization, your new KM tool can turn into a costly ghost town. Teams or departments may not have seen the benefits in adding their knowledge to the new system. The KM initiative also may not have had executive buy-in at the top of the organization, making it difficult to ask teams to investment time in learning and using the new system without top-down support. There can be a number of critical non-technical, non-system KM considerations that are foundational to your initiative’s success. Below are a few of those considerations that go beyond choosing the right tool:

  • Pull together a cross-functional team of people representing different departments and groups. Those representatives will have a say in the KM implementation and be able to advocate for their team’s needs. They will also act as champions of the initiative within those teams, helping to spread support for the initiative across the organization.
  • Work with your organization’s executive director to secure their buy-in. Having executive support can help make the implementation a priority across the organization.
  • Include critical documents or announcements in your system to require that staff access it on a regular basis. It may be helpful to work with your organization’s operations team to determine what kinds of forms or documents could be posted so that the new KM system would be the only location to access that information.
  • Establish a point person to not only manage implementation prior to launch but also lead the KM initiative months and years after go-live. Knowledge management can be thought of as a form of gardening. When you plan your garden you need to ensure there is enough water, proper sunlight and the right kind of soil to let your plants grow. (Think of securing executive buy-in, establishing your cross-functional team and selecting the right tool as foundational requirements for your KM garden.) After your plants (useful content and knowledge) germinate and grow, your job as a gardener is not finished. You must continue to nurture, prune and weed your garden to ensure that it thrives. Designating a long-term KM point person (gardener) will help your organization to continually assess how teams are using the system, what changes or improvements should be better facilitate information flow and what irrelevant or outdated content should be removed (weeded) from the system. It can be a significant organizational investment to have Knowledge Manager be part of someone’s role responsibilities, but it is one that can help promote the long-term success of your KM initiative.

Nonprofit 411: The Importance of Succession Planning for Your Nonprofit Organization

By Dennis Gilligan, SVP Sales Leader, Eastern Insurance Group LLC

Your nonprofit organization may be dependent on a team of volunteers on the Board and on the staff to run its operations. Even if a team member commits to long-term service, things happen in life that may cause a disruption to their commitment. Your nonprofit should be prepared for unexpected changes, such as the resignation of a key Board member or a dedicated staff member.

To preserve the organization in this event, your team should engage in succession planning. This is the process by which you determine specific critical roles within your nonprofit, identify and assess possible successors for these roles, and provide these successors with the necessary skills and training for future opportunities

By creating a careful plan of action, your nonprofit organization can make sure the least amount of disruption occurs in the event that a key board member or staff member leaves.

 

Need for Succession Planning

Nonprofit organizations are similar to for-profit organizations because Board members or staff members can unexpectedly leave, move to a different position, or fail to fulfill their role.

Recruitment and training of top talent can be difficult and time consuming, particularly when trying to fill a vital position that was suddenly vacated. It is generally more effective to recruit from within to fill these roles, and succession planning can make this process more efficient.

 

Succession Planning Process

The following activities are typically part of the succession planning process:

  • Determine the roles and skills critical to your organization’s growth.
  • Guarantee that the Board and staff will manage succession transition smoothly.
  • Identify key Board or staff members who could fill other roles in the event of a vacancy and ensure they are highly engaged and satisfied with their roles and the organization itself.
  • Create a timeline for leadership successions that are planned.
  • Cross train staff members on various roles to prepare them for a possible unexpected role shift.
  • Identify and understand what team members filling those positions will need to effectively make the transition.
  • Support newly-placed staff members through a clear explanation of responsibilities, training, mentoring, and coaching.
  • Review, evaluate, and improve the succession planning process as role filling takes place.

Losing a key leader or staff member can be a big burden if you are not prepared. Succession planning can help ensure minimal interruption so that your nonprofit can focus on making a difference rather than disruptions. For more information on recruitment and retention strategies, please contact us at 800-333-7234.

Provided by Eastern Insurance Group LLC | This article is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel or an insurance professional for appropriate advice.

Nonprofit 411: Negotiating a Major Gift—Respectfully

By Diane G. Remin, President, MajorDonors.com

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Setting the Stage:  You just asked for a gift, and received a response that falls into one of three broad categories:

  • Yes. That one is easy.
  • “Let me think about it”—and all its variations, e.g., I have to talk to my <fill-in the blank>. “Let me think about it” is not a trigger to negotiate. Ask questions. The donor may simply need time to think. If you are uncertain, then err on the side of caution:  don’t negotiate.  But do schedule a next visit.
  • No way: “There is no way in the world I/we can do that” or “I/we can’t possibly afford that much.”  You are listening for an absolute “no” that will be expressed through the words, voice tone and body language. It’s time to negotiate.

The following are not immediate negotiation triggers:

  • “Wow, that’s a lot of money.” This is an observation, not a definitive statement that the donor can’t or won’t make the gift. Respond with an “impact statement,” e.g., “With that gift, you will be <fill-in the blank>.”

Tip:  Refrain from inserting your own money values into the conversation.  A seemingly empathetic reply of, “Yes, that is a lot of money,” may encourage the donor to recalibrate. Focus on impact: “A gift like that will <example of what the gift will accomplish>” or “You will be making a big difference.”

  • “I wasn’t expecting that.” This is an expression of surprise that can mean many things. Keep the focus on the project and on how involved the donor wants to be in the opportunity you presented.
  • “How did you come up with that number?” Respond with known interest in the organization/work, not process: “We know how much you care about <nonprofit or the particular program/project> and thought you would want to take a leadership role” or “thought this might be the level at which you would want to be involved.”

3-Step Donor-respectful Negotiation Strategy

Note:  Although the principles apply to gifts of all sizes, this 3-step process was designed with gifts under $1M in mind.

  1. Try a timing solution: If you asked for the gift as a lump-sum, e.g., for an outright $100,000, test a timing solution: “Would you be able to fund this project the way you’d like to if we spread your gift over time—would $25,000 a year for 4 years for a total of $100,000 make it possible?”
  2. Reduce the ask amount by 50%: If timing doesn’t get you to “yes,” then halve the amount and re-ask.

Why 50%?

  • If the donor could come close to the amount you asked for, you wouldn’t hear an emphatic “no way.”
  • Even if 50% is still too high, it’s clear you are listening.
  • It doesn’t feel like haggling.

3. Invite the donor to name an amount: If a 50% reduction doesn’t do it, then ask the donor at what level s/he would like to             participate: “So John, I know you would like to support the initiative…. Tell me what amount works for you.”

Whether or not a gift results, this simple, respectful negotiation strategy insures that the donor and solicitor feel good at the conclusion of the conversation.

 

Nonprofit 411: Alert! Wire Transfer Fraud

By Russell Greenwald, VP and Director, Technology Consulting Practice, Insource Services, Inc.

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Wire fraud emails are personalized, well-crafted emails that look official and appear to be coming from a member of an organization’s senior leadership. Often they ask for personal information or for money to be sent immediately. They are very convincing and can be alarming to the recipient. ANY email that asks for a wire transfer warrants a second set of eyes. If you have doubts about the email, request a second form of validation as a control to confirm the authenticity of the email. You can also ask your IT department to inspect the email to validate the legitimacy of the request.

Recently, one of our clients had a scammer contact them – luckily they weren’t fooled, but their story illustrates how clever these scammers can be.

The scammer emailed the company CEO pretending to be their Board Chair. His email address looked legitimate and official. The email asked a simple question, “are you around?” Once they connected via email, the “Board Chair” asked the CEO for assistance to transfer the funds, and that’s when the red flags surfaced. To confirm this wasn’t a scam, the CEO replied asking two questions that he believed only the Chairman would know the answer to: his dog’s name and the model of his car. The scammer almost instantly responded with the correct answers, even adding humor to the response.

Still concerned with the validity of the request, the CIO was brought in to assess the situation. He quickly showed the CEO and CFO that a basic Google search of the Board Chair’s name and dog or car resulted in a photo of the Board Chair with his dog – along with the dog’s name. And in the background of the picture? His car! After the scammer responded with a $50,000 request and wire account information, the CEO asked him a very specific question about his family to verify his legitimacy and the scammer went silent. Undoubtedly moving on to another target.

Another example of this scam occurred when a sales based company was nearing their end of quarter and sales reps were working long hours to quickly close deals. A phishing email came in prompting a representative to click on the linked contract, which then re-prompted them to enter their username and password which they did. The same email then went out to the entire company from the initial recipient. At least 30 additional representatives also entered their information in real time which pre-tempted the raising of a red flag.

These scammers are deliberate and calculating. To ensure that this doesn’t happen to you, here is our wire fraud identification checklist:

  1. Check the “from” address carefully. Is the domain name misspelled, i.e. off by one letter?
  2. If the general attitude of the message seems out of ordinary, it probably is fraud.
  3. Always ask for a second form of validation when there is a sensitive request made via email. A phone call is best, but asking for a text to your personal cell phone with a pre-determined secret word can also be effective.
  4. Seek a second opinion as often as you like. It is always best to err on the side of caution.
  5. Look into anti-spam/phishing software that helps prevent these types of emails, even beyond user training. We suggest mimecast.com.

Too Many Nonprofits? We Need to Answer the Bigger Question

By David Shapiro and Jim Klocke

In recent weeks, the question of whether Massachusetts has “too many” nonprofits has reemerged.  There are a number of factors that should be considered, including nonprofits’ immense economic impact—one in every six jobs in the Commonwealth.  But we think there’s a bigger question at hand.  Are we doing enough, and in the right way, to solve the challenges that nonprofits and their partners (in government, philanthropy, business, and the public) work on every day?

Those challenges are at the heart of the promise of our Commonwealth and our nation.  How do we broaden pathways to opportunity?  How do we help communities thrive?  How do we improve our quality of life, particularly for the most vulnerable members of our society?  

We believe three areas are critical:  innovation, resources, and determining what works.  Let’s take a look at how we can get better in each of them.

Innovation:  Innovation abounds in the nonprofit sector–but more is needed.  The spectrum of nonprofit innovations is amazing, from cutting-edge biomedical research to new ways of financing community development.  But do we have enough good ideas for all of the challenges facing society?  No.  To promote more innovation, we need to keep the doors open wide to new ideas, and sometimes this means new organizations.  We must also ensure we are drawing on existing infrastructure and expertise to maximize impact, address any redundancies, and bring people and organizations together in ways that spark new ideas.  The latter point—collaboration—requires intentionality and presents great opportunity, notwithstanding the risks involved.  The appetite for risk that breeds game changing ideas in the private sector must be applied to nonprofits by those who invest in and operate them.

Resources:  Considerable resources flow to the nonprofit sector—and yet more are needed.  At the most macro level, consider the unmet needs in fields such as healthcare and workforce readiness.  In addition, there are solutions throughout the nonprofit sector that lack only the capital to be taken to scale.  The best places to apply new resources include newly-emerged problems, new solutions to new and old problems, or the expansion of existing ideas that have been proven to work.  But they must allow nonprofits to operate from a position of stability and strength.  The “do more with less” approach we have often made our nonprofits wear as a badge of honor can backfire, diluting their effectiveness.

Determining What Works:  The nonprofit sector’s focus on evaluation is growing–but it needs to grow more.  Evaluation is critical to making the most of existing nonprofit capacity, and adding new capacity when it is needed.  The good news is that the nonprofit community and its funders are working together more on evaluation.  Early views of “everything should be measured” or “we can’t measure anything” are giving way.  They’re being replaced by a common understanding that evaluation is important, difficult, and a long-term effort.   

If the nonprofit sector and its partners get it right in those three areas—innovation, resources, and determining what works—the question of how many nonprofits we should have will take care of itself.  And we’ll do a better job of building a more perfect Commonwealth.  We’ll continue to be a beacon for the nation with a strong, high-impact nonprofit sector that improves people’s lives.

David Shapiro is the Board Chair of the Massachusetts Nonprofit Network and President and CEO of MENTOR: The National Mentoring Partnership.  Jim Klocke is the CEO of the Massachusetts Nonprofit Network.