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

Sunday, April 26, 2009

Stimulus Caution

With the drying up of donations from individuals, grants from foundations, and contracts from local governments, many smaller, locally-based nonprofits are looking to Washington for funding, hoping to get in on some of the economic stimulus packages as a means of surviving this recession.

While the temptation for "big money" or "easy money" is a terrific lure, and we do need to investigate all potential funding sources for our organizations, I do want to express my concern that you approach with caution.

Consider not only your short-term money needs, but the long-term effect of the funding, and your capacity to take on the project.

Most of these stimulus programs are not designed for grass-roots organizations; they pretty much require large structures, with already large budgets, and the capacity to take on new projects without much additional overhead.

Seriously, if you have an annual budget of only $500,000 you should not be looking at a grant for $300,000/year for only two years, and with only 5% allowed for administration.

First off, you're likely not going to be approved for such a thing, and the time spent pursuing this would be better spent on more realistic prospects. But secondly, if you did get the grant, are you really prepared for such a massive expansion of your program? Can you realistically manage it with what they allow for overhead? And what will you do when the money goes away? That will be quite a shock to your organization on all ends.

Now, that doesn't mean you can't benefit from the stimulus money that's been announced. By partnering with larger organizations as a sub-contractor, you can help them perform the work (keeping your staff employed) without being directly obligated to the Federal government and all the bureaucracy that that entails.

So, do keep your eyes and ears open for these opportunities, but do so with caution, with careful analysis of your own capacity and how the goals of the funds fit with your programs, and with a willingness to be a partner with others in your community.

(Of course, a stimulus bill aimed at "bailing out" small, local nonprofits would be quite welcome as well...)

Thursday, April 09, 2009

What are your volunteers worth?

According to the Independent Sector, the estimated dollar value of volunteer time for 2008 is $20.25 per hour. According the report, this value
" based on the average hourly earnings of all production and nonsupervisory workers on private nonfarm payrolls (as determined by the Bureau of Labor Statistics). Independent Sector takes this figure and increases it by 12 percent to estimate for fringe benefits."
Of course, for specialized work (lawyers, architects, etc.) the BLS assigns higher average rates, but only use them when the specialist is volunteering in their professional capacity (IE: Don't value a Doctor's work at the higher rate if she's helping with the filing).

Why are these values important? Because volunteer time is part of how we in the nonprofit sector leverage donor dollars. It's part of the story of how we can get $10 worth of services out of a $5 gift. Donors, large and small, private and institutional, want to hear that their investment in your organization is helping to bring in additional resources.

Track the hours and assignments of your volunteers, and include that value in budgets as an in-kind donation. Tout that figure in newsletters and annual reports. But, according to FASB (the Financial Accounting Standards Board), only include the figure in official reporting if "the organization would have purchased the services if they had not been donated."

So, what do you think of the $20.25/hour figure? Too high? Too low?

Thinking of the small, local nonprofit where I'm currently the Interim Executive Director, and other like-sized organizations, I wondered if we were now valuing the volunteers more than the staff.

Our average wage for non-supervisory staff would be about $15/hour, adding 12% as Independent Sector did for "benefits" (really, just payroll taxes, SSI, etc. - most of these staff are part-time and not receiving health insurance, etc.), that bring our figure up to $16.80/hour.

Do we now need to launch into a conversation about how we value our staffs?