Ken Goldstein, MPPA

Ken Goldstein has been working in nonprofits and local government agencies from Santa Cruz, to Sacramento, and back to Silicon Valley, since 1989. He's been staff, volunteer, board member, executive director, and, since 2003, a consultant to local nonprofit organizations. For more on Ken's background, click here. If you are interested in retaining Ken's services, you may contact him at ken at

Monday, July 31, 2006

The Fifth Requirement

Leila Johnson, of the Data-Scribe blog, has a great post on 5 Things to Demand from a Consultant. (Data-Scribe provides database, Web site, Internet branding, and software training services for nonprofits, associations, and small businesses.)

The first four are good advice, but fairly basic:
  1. A nondisclosure agreement,
  2. Past project samples or references,
  3. A written contract or a willingness to sign yours, and
  4. Great listening skills.
These are all things that are commonly advised, and I am happy to supply to my clients and potential clients. What got my attention, though, was #5, An interest in what you do.

It got my attention because I consider it to be a basic requirement, but it is rarely said - or, at least, not said enough. When looking for consultants or freelance writers the focus is naturally on the skills, background, and history of the candidate. But a good fit is also essential - particularly for nonprofit organizations.

On the Goldstein Consulting web site, I have always said:
I only accept clients and projects that I believe in. When I accept your assignment, your mission becomes my mission and I am committed to your success.
I believe this completely. I could not accept an assignment - no matter how lucrative it might be - with an agency that has a mission I'm against. I have, in fact, turned such organizations down.

When you are interviewing your potential consultant or freelancer, after you get through the resume, take some time to get to know the person. What do they believe in? Will they be as committed to your mission as you are? Or will they only be committed to sending you an invoice?

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Friday, July 28, 2006

Nonprofit Fights Poverty With Poverty

"In 2005, Helping Hearts distributed over $4,700 in various food and clothing donations, found temporary and part-time work for more than 110 adults, and was instrumental in the passage of increased homeless and transitional housing funding in the city. It also had an operating budget of $18,280, putting it below the federally mandated poverty threshold for a family of four."

Does this sound like your nonprofit organization? Luckily, this is just a bit of comic relief, courtesy of the folks at The Onion. Unfortunately, it does hit a bit close to home in its description of fighting poverty with "a 1995-model photocopier, a fully functional fax machine," and a "windowless, un-air-conditioned office."
"We've raised almost enough money to provide blankets and socks for the most needy in the office, which gets very cold in the winter months... When you see that look of appreciation on the executive vice president's face, it's all worthwhile."
Read the whole article - You'll laugh till you cry with recognition. Then, go home, and have a good weekend.

Then, when you return to work on Monday, maybe we can discuss why we feel required to work in sub-standard offices with out-dated equipment. Why do nonprofit leaders feel guilty when they sit in a new chair? You know, the kind where all four legs reach the floor at the same time?

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Thursday, July 27, 2006

Working with Consultants - Make Some Noise!

I'm going to let you in on a little trade secret. If you hire me to be your consultant or your grant proposal writer, you won't be my only client. The continued viability of my business (and my mortgage payments, etc.) depends on my juggling several clients at a time.

I doubt any other consultant (nonprofit or not) is any different. We may have one or two "main" projects at any one time, supported by a few "back burner" projects that are less demanding, but we all have multiple clients - - or we're looking for a job.

When working with me - or any other consultant, grant writer, or other contractor - it's going to be up to you to make sure that your project remains off the back burner and stays on the top of our to-do lists. If you want to get the most out of your relationship with a consultant, you have to be proactive in the communications.

I keep calendars of important dates for each of my clients - meetings, due dates, etc. - but it is your responsibility to review that calendar too. If you're concerned that a deadline is coming up, don't be afraid to call or email and remind me.

I rarely, if ever, miss deadlines. But I admit that sometimes I get uncomfortably close for my clients. It's my fault, it's true. But it's your deadline too.

Bug your consultants. You are paying us for the right to bug us. Get your money's worth and stay in contact. Because the clients who I do pay the most attention to are the ones who don't let me slip away.

Okay, confession time is over.

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Tuesday, July 25, 2006

Volunteer Match

I'm in the midst of planning an event and meeting for one of my nonprofit clients right now, and we're in need of volunteers to help the day run smoothly. In addition to sending out emails to all our networks, I also just posted a listing for the event on

VolunteerMatch is a great resource that I've used many times in different organizations. Basic membership and local listings are free, premium membership and wider broadcast of your volunteer opportunities are by subscription.

If your nonprofit uses volunteers, either occasionally or on a regular basis (and what nonprofit doesn't?), then you should consider joining and adding a listing at

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Friday, July 21, 2006

Tainted Money?

What if a major donor of yours - one whose name is featured on your building plaque - were to be arrested and found guilty on charges of fraud and embezzlement? Would you remove his name from your building? Would you return the money? Would you make a donation to the fund for those who he swindled?

These are not just abstract ethics teasers for the many organization in the Aspen, Colorado area that were philanthropic beneficiaries of the late Ken Lay, who died just after conviction (but before sentencing) for his role in the Enron scandal.

The Aspen Music Festival and School is one organization facing this question. Their Garden Court bears the Lay name in prominent signage. The University of Missouri is wondering what to do with a $1.1 million endowed professorship Lay donated to the school's department of economics. In Katy, Texas, the YMCA of Greater Houston has no such problem; Lay wrote them a letter just after his conviction asking them to remove his name from their facility.

Had Lay lived, would he have released all of his Foundation's beneficiaries from their obligation to recognize him as a donor? This is a question of donor intent that we may never know the answer to. Meanwhile, nonprofits have to decide what they will do about it.

When Robin Hood steals from the middle class to enrich himself, but then gives a little bit back to the poor, how tainted is that money? Do you continue to promote your association with a questionable donor?

Public relations expert Jeanette Darnauer, owner and founder of Aspen-based Darnauer Group LLC, thinks distance is the best policy:
An organization's reputation takes years to build and it can be destroyed in a heartbeat. I think the music festival should do what's right to maintain their integrity and to protect their reputation. I certainly think they have a stellar reputation. But Ken Lay was convicted of hurting a lot of people. Any continued association with him is negative for the festival. I don't think they should disgrace their name by continuing to honor him by leaving his name in a place the public can see.
If you were on the board of the Aspen Music Festival and School, what would you do?

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Wednesday, July 19, 2006

Transferring Assets Between Nonprofits

Here's a question that I received by email this week:
What are the rules for giving part of your profits from a fundraiser to another nonprofit?
What follows is from my email response:

Interesting question! If you are asking about IRS rules for transferring assets to another nonprofit, I don't think it's very difficult at all, although you should consult with your accountant to make sure it's done properly.

I think the bigger question here is the ethical one. What was the donor's intent?

If the money were from a grant, or from a single large donor, there'd be no doubt that you'd have to have a conversation with that funder about your intentions and to get their approval for the transfer.

Your email suggests to me, however, that it was from many smaller donors as part of an event that you held, making it more difficult to ask each donor.

Many nonprofits would (erroneously) assume that money raised this way is completely unrestricted and that they can use it for whatever purpose they choose. But, you really have to look at how the event was advertised, and what implied promises were made regarding how the money raised would be spent.

If the nonprofit you wish to give a portion of the proceeds to has very little to do with your mission, or the program promoted in association with the event, then it's probably not a wise decision. For example, a child welfare organization giving a portion of their assets to an addiction recovery clinic.

If, on the other hand, the reason for the transfer is that the other organization is now running the program that the event was held to support, it is clear that moving the funds would keep with the donor's intent. For example, if you were partnering with the other organization on the project, but they are now the sole fiscal agent for it.

In a situation where a nonprofit is dissolving and closing operations for good (such as in a bankruptcy), one of the last decisions the Board is required to make is to select a successor organization with a mission as close to the old organization's as possible to receive any liquidated assets once creditors are fully paid. As a nonprofit, these remaining assets cannot be taken as profits; they must remain with a 501(c)(3) (or similar) organization.

I hope this information helps in your decision. Please let me know if you have any follow-up questions.

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Monday, July 17, 2006

Charity or Philanthropy?

Karen Woods, of the Acton Institute, has a new commentary posted on Charity vs. Philanthropy in which she draws a distinction between philanthropy (of the sort practiced by Warren Buffett, Bill Gates, and others) and charity (as practiced by the average person):
Philanthropy, for all its good intentions, does not necessarily imply a personal connection with the needy person - though it can and sometimes does. Philanthropy is the more institutional, "big-picture" cousin of charity, which is the personal and direct connection to those in need.
It's an interesting distinction she draws, with a focus on the importance of that personal, grass-roots connection that small-donor charity brings. In Woods' view, one is the micro and the other the macro, and both are necessary.

Of course, by these definitions, we'd all prefer to be the beneficiary of Philanthropy rather than just charity. But, as Woods points out, while philanthropy may be attractive to our budget process, most nonprofit work "is generally conducted by small, community based, often faith-informed, programs without dependence on big government" - and that is her definition of charity.

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Friday, July 14, 2006

The High Cost of Reporting Requirements

The United Press International has just discovered what those of us who work within nonprofit organizations have already known for years: nonprofit social service providers spend too much time and money trying to meet the reporting requirements of funder.

They quote a yearlong RAND corporation study that found that nonprofit staff spend up to half of their time (and 11% of their agencies' budgets) collecting information, tracking expenses, writing reports, and attending meetings to meet funding requirements.
"If non-profit social services groups can find ways to comply with reporting requirements more effectively and efficiently, they will have more time and money to help the clients they serve," said lead author Sandraluz Lara-Cinisomo, a RAND developmental psychologist. ... Lara-Cinisomo said funding agencies should try to find ways to limit the type of information they request of non-profits to the most necessary and relevant.
Nonprofits are already aware of the need to spend as little time and money as possible on meeting their reporting requirements. I just hope that funders pay attention to the second bit of advice about limiting what they request.

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Sunday, July 09, 2006

Feed Me!

I will be away from the office for the next several days, and most likely will not have the opportunity to post anything here. This is a good opportunity for you to subscribe to this blog's feed. By subscribing you'll always know when there are new postings here without having to check the site.

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Friday, July 07, 2006

Bad News in Threes

They say that bad news always happens in threes, and within the last couple of weeks three nonprofit agencies with which I've been associated have made negative announcements. One is going through another round of lay-offs, another is having lay-offs and disclosed a massive deficit and service cuts, and the third is shutting down completely.

Frankly, one of them has been mismanaged for years and is mostly responsible for its own problems. The other two (and even the first to a degree) are simply victims of the economy.

Despite reports that donations increased in 2005 (I've reported on that earlier), expenses increased as well. Besides expenses increasing, demand increased as well. Certainly a few more dollars came the way of the nonprofit sector in the last year, but it did not keep pace with the additional clients seeking social services or the cost of providing services.

The economy is on the rise, we are told. What new jobs there are, however, don't include health insurance. Retirement benefits are being slashed leaving seniors without support. Low-income parents must choose between putting gas in the family car or paying for day care so they simply go to work.

And who picks up the pieces when these things happen? Who fills in the cracks in the system? Certainly not the government. The nonprofit sector is what allows the economic engine to keep churning as it does, without providing benefits to employees.

Be proud of the work you do, and be sure to tell the story of how your organization contributes to the community and allows the rest of the economy to grow. And then ask for another donation.

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Thursday, July 06, 2006

Should Philanthropy Go On Forever?

Most charitable foundations in this country operate as perpetual giving machines. That is, they manage their funds and grant making in such a way that they will never spend out their entire endowment. In fact, many manage to grow their endowed base, even while awarding out millions of dollars in grants each year.

The IRS mandates that foundations must spend down at least 5% of their endowment each year, or face penalties. The perpetual foundations usually treat that 5% minimum as their set goal, and rarely give above that. The other 95% stays tied up in investments and helps to grow (or at least maintain) the endowment.

Philanthropists will give you two main reasons for setting up perpetual giving machines.

The first reason most people think of is, "to maintain a legacy." If they can't live forever, at least the foundation bearing their name can. It's usually worded something like, "I want to continue to do good long after I'm gone."

Many in the nonprofit field - who would like to get their hands on the foundation money sooner, rather than later - look at this argument as pure ego. "We have problems that need solving now," we argue, "Why grant out the money 5% at a time, when if you grant it all today we could cure cancer and AIDS, develop renewable energy sources, and end childhood hunger in this generation."

The other main reason for the perpetual foundation is a simple economics equation. By managing endowments in a manner that grows them - even while making grants - more money is eventually generated for nonprofits. Basically, would you rather have $10 million today, or $30 million over time?

It's a sound argument in a strong economy. But all one has to do to argue with it is to remember back just a few years to the dot-com bust, and what it did to foundation endowments (particularly those in my area, which were heavily invested in tech stocks). The means for growing endowments are investments, and there are no guarantees.

More and more, in the last few years, I've seen articles about philanthropists who are saying, "To Hell with posterity," and making plans to give their fortunes away entirely in their lifetimes. The latest of these being Howard G. Buffett (son of Warren).

According to the Chicago Tribune, Buffett doesn't intend to let philanthropy go on forever (get passwords here). As you've certainly heard by now, the senior Mr. Buffet is giving his fortune away over the next few years. A portion of that will be going into the foundations of each of his children, including Howard, who intends...
... to try spending the yearly installments of about $50 million from his father as fast as they arrive. He is not considering having his philanthropy operate in perpetuity but expects to set a distant date at which it will disburse its assets and shut down.
Bravo Howard! Let's see who is the next philanthropist to get on board.

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Wednesday, July 05, 2006

Thick Skin and Good Advice

There's an old quote from Babe Ruth that I love to apply to fundraising: "Each strike gets me closer to the next home run."

I was reminded of that yesterday when I read Adviser to fund-raisers: Go where the money is in The Journal News. The article is about Peter J. Gallagher, who has been in the nonprofit fundraising business for over 40 years.

"Failing nine times out of 10 is enough to get a worker fired in most jobs," the article begins. But, in the world of nonprofits, "[G]arnering a 10 percent response rate to fund-raising solicitations is considered a benchmark of professional success."

That's important for all of us to remember. At some level we do know that it takes about a dozen asks (or grant applications) to get to one "yes." But at another level, we all want our statistics to show greater success than that. The key to reaching a higher-than-average success rate is to maintain a positive attitude.
"You can't allow yourself to get discouraged," Gallagher said. "It is like when you fall off a horse. Get back up again. ... You have to define what your message is so that you can persuade people to hop on your boat."
The reference in the title of the article is, of course, to another old quote. Willie Sutton, a notorious bank robber of the 1930's, was once asked, "Why do you rob banks?" "Because," Willie replied, "That's where the money is."

For nonprofits, where the money is, is individual donors. I've talked about it here, and you've heard it a million times elsewhere, but it bears repeating: "Foundations and corporations account for a combined 17 percent of donations. Individuals account for 83 percent."

Gallagher's advice to fundraisers: Go where the money is

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Sunday, July 02, 2006

What Exactly Is a Grant Writer?

This seems like an obvious enough question, and yet it does come up from time to time, even in professional circles, as it did this week in an online discussion group I belong to.

One the main services I provide to my nonprofit clients is popularly called "grant writing" although, technically, it's not accurate. What I do is more properly called "grant proposal writing."

The people who write the grants are the foundation officers who [hopefully] respond to my proposals. And, apparently, some of them take exception to people such as myself calling our profession "grant writing."

Personally, I believe that this is one of those cases where common usage wins over linguistic perfection. When I say that I have several clients for my grant writing services, it is understood by all that these are nonprofits looking for funds, not foundations looking to distribute money.

When I have tried to be liguistically correct and tell people I was a proposal writer, on the other hand, it has caused confusion until I explained it more clearly as grant writing.

So, I will continue to abuse the language and call myself a "grant writer." I sincerely apologize if that offends you.

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