[Ruth.McCambridge]

We are going to be hosting an online event on October 27th which is on this issue of nonprofit reserves – the reality show. Among our speakers will be Jeanne Larson who is a part of this community and who runs the Northern Dental Access Center. She has an enormously interesting story to tell about the way her organization repositioned itself during the pandemic – a job still in progress. The story is one of snatching opportunity from crisis in a way that only builds the community’s strength and self reliance.

We are also thrilled to be able to present Thad Calabrese, one of the country’s most foremost researchers on this topic who has real insights into the complete capital structures of nonprofits, and Hilda Polanco of BDO/FMA whose hands on understanding about the ways in which reserves are accumulated and used is probably unmatched.

We will send you a save the date later in the week. and meanwhile post your reserves story here if you have not already done so.

[Ruth.McCambridge]

A compilation of other responses to Kristine were sent in by email and are posted below.

What I like about these is the specificity plus the focus on staff pay and benefits during inflation. I placed Marvin’s third because that is the order in which these came in but I think his comments are particularly apropos on this day when racial equity was given at least a nod in the ed debt reduction action from the White House. The historic moment is being taken into account by many posting in these forums as we have already noted even and maybe especially in times of inflation. .Here is what Marvin had to say in part: ” justice costs money. It would be great for newer EDs to see this as a constant instead of an add-on. The next generation has a shorter waiting timeframe for the execution on justice. Whether it be total compensation or benefits. Giving someone 2 weeks isn’t the standard. But many think that is still us and adhere to it. While wondering why their staff isn’t rejuvenated. Or why new moms are so exhausted after returning to work after 2 weeks off after the birth of their child. These policies and the funds to support them haven’t changed in decades. ”

FROM JEFF: I really like one of the suggestions in a different forum about doing a one-time Cost of Living Bonus vs. an ongoing salary adjustment. Helps people who need it, but also buys time to see what happens next. I know one standard trick of small nonprofits – that I do not like – is telling people “Ok, your salary stays the same but you can just work 35 hours instead of 40.” I think that is unfair to the worker and doesn’t really help because their mortgage and grocery bill didn’t drop 10%. So it’s not really a raise.

Jeff Russell – CEO
Jitasa

FROM NANCY M: We use the June NYC CPI to determine salary increases for the fiscal year starting October 1. Since gas prices were a big issue, we created a special gas reimbursement for staff that are required to drive to complete work responsibilities. Full time staff that drive 4-5 days a week were given an extra $100 incentive each quarter (every three months beginning April 1, 2022) when gas prices in NYC average above $3.50 per gallon. Part time staff that drive 1-3 days per week are given $50 every quarter. This is in addition to the federal mileage reimbursement rate which was recently raised.

from Nancy M.

FROM MARVIN: Firstly, I do wonder what’s the organizational salary ranges? If they are closer to the poverty level then the organization should be budgeting more for things like COLA and other financial benefits. But if the salary ranges are higher than market for the job titles then those ranges might be enough to support staff. Then there’s less need to provide benefits piece by piece which seem more defensive than offensive.

Secondly, I do budget a separate sum of funds for operational opportunities versus a separate sum of money for larger staff training and other needs annually. When George Floyd was murdered I saw a lot of orgs posting emails of racial support but not as many offering mental health support to black and brown folks. Or helping staff deepen their own DEI organizational work.

Finally, justice costs money. It would be great for newer EDs to see this as a constant instead of an add-on. The next generation has a shorter waiting timeframe for the execution on justice. Whether it be total compensation or benefits. Giving someone 2 weeks isn’t the standard. But many think that is still us and adhere to it. While wondering why their staff isn’t rejuvenated. Or why new moms are so exhausted after returning to work after 2 weeks off after the birth of their child. These policies and the funds to support them haven’t changed in decades.

I think it is time.

Best,
Marvin Webb, MS, MBA, MFA
Chief Financial Officer
Funders for LGBTQ Issues

[Ruth.McCambridge]

I thought I’d take the opportunity to link to an article by Mark Hager, one of the moderators on this site, entitled “should your nonprofit build an endowment?”
https://nonprofitquarterly.org/should-your-nonprofit-build-an-endowment/#:~:text=This%20isn%E2%80%99t%20endowment%2C%20or%20even%20quasi-endowment%E2%80%94it%E2%80%99s%20just%20operating,of%20creating%20a%20financial%20bedrock%20for%20the%20organization.

It is one of the most clear headed pieces on the topic I have read and since Hager is a moderator here, it would be great to hear from some of the rest of you on this topic. Short message, endowments aren’t for many of us nonprofits, and the IDEA of one has distracted many a board from a better use of capital, but they can appear in surprising places to good effect!

[Ruth.McCambridge]

I know that there are people among the BETA participants who have received a significant one time windfall in the last few years and who were enormously strategic about what they did with it. I would love to hear from some of them regarding these issues. In some cases, I believe they plugged a hole where undercapitalization had been the norm, for instance in BIPOC led organizations. This, then, might suggest a remedial approach mixed with one that fully respects the urgency of the moment and the need for a strong trajectory.

[Ruth.McCambridge]

I am struck by this paragraph of yours Nancy:

“Three nonprofits in my sector went out of business in the past two years and left a void with no services in parts of the state. They had no cushion to weather the ups and downs of Covid or the cash flow problems of late government payments, We can afford to do business in New York City where the government routinely takes a year to register a contract and then expects us to bill for 12 months of service that we already provided. Charities that need to take out bank loans with interest to meet their cash flow obligations will never catch up and default and/or bankruptcy always loom.”

and think that it is worthwhile to highlight the degree to which funders can affect what is necessary for good financial management. In the case of New York agencies contracted with the state, the contracting problems are long term, legend, terrifically resistant to reform and sometimes fatal to community based organizations.

It makes me think that there should be a movement to force the state to capitalize nonprofits sufficiently to allow for the state’s incompetence if contract problems are at all chronic.

That said, the advocacy in New York on this issue has been amazing. The system is just stubbornly set on disrespect of the sector and that needs to change in more than word and intention.