Coupling General Operating, Capacity Building Grants Drive Outcomes

Providing long-term general operating support along with capacity-building grants may be a “gold standard” funding practice that drives positive outcomes achieved at the community level, a report commissioned by the Citi Foundation and produced by Synergos finds.

Drawn from secondary research and interviews with more than fifty funders and nonprofits, the report, Funding From a Place of Trust: Exploring the Value of General Operating Support and Capacity Building Grants (41 pages, PDF), found that coupling multiyear general operating support with funding for capacity building allows nonprofits to avoid the tradeoff between investing in capacity and programmatic growth on the one hand and sustaining that newly acquired capacity on the other. Given that the benefits of general operating support and capacity building play out over time, the report argues that funders should invest early and for the long haul — with grant terms of five to seven years. One essential factor in the effectiveness of general operating and capacity building support, the study found, is the willingness of a grantee to make the changes necessary to move from a project mindset to a broader impact-oriented mindset.

According to the report, general operating support is a form of “trust capital” that, when coupled with capacity building or programmatic funding, establishes a trust-based relationship and helps re-balance the power differential between funder and grantee. Leveling the playing field also helps foster honest two-way communication and, in turn, learning and capacity building for both parties.

The report includes case studies of four recipients of flexible funding — Career Ready, the Firelight Foundation, the Global Fund for Children, and Whatcom Community Foundation.

“Donors should acknowledge the limitations of short-term cycles of one to three years which tend to be the norm in the funding landscape,” the report’s authors conclude. “[General operating support] combined with targeted [capacity building] funding can give organizations the time, space, and confidence to rethink and strengthen their engagement with the communities.”

Share Letter with Congress

This week, United Philanthropy Forum joined other national nonprofit and philanthropy organizations in signing on to two letters sent to Capitol Hill on behalf of nonprofits, relating to proposed COVID-19 and economic stimulus package legislation.

On March 12, 2020, the Forum signed on to a letter to Congressional offices outlining why nonprofits must be included in COVID-19 stimulus package legislation. This letter highlighted practical policy examples and solutions for Members of Congress to think about when drafting legislation. On March 14, 2020, the House voted 363-40 to pass H.R. 6201, Families First Coronavirus Response Act. This bill ensures that nonprofits can use a tax credit to offer paid leave for their employees – one of the requests in the letter.

On March 18, 2020, the Forum signed on to a second letter that asks Congress to provide an infusion of $60 billion in capital to America’s charitable nonprofits to maintain operations, expand the scope to address increasing demands, and stabilize losses from closures throughout the country. Later that evening, the Senate voted 90-8 to pass the House bill and the president signed it into law. The final bill includes paid sick leave, food assistance for vulnerable populations and financial help for coronavirus testing.

Currently, Senate leaders are already working on another stimulus package, with a focus on relief for small businesses. As Congress continues to work on additional legislation, we encourage you to post the 2nd letter on your own websites and share the letter with your elected officials, and highlight two key asks in the letter:

  1. Urge them to infuse $60 billion in capital to America’s charitable nonprofits so they can be equipped to help the most vulnerable affected by the COVID-19 crisis.
  2. Urge them to enact an “above-the-line” or universal charitable deduction for charitable contributions through the end of 2021. Congress should permit taxpayers to donate today – at the height of the pandemic – and claim the benefit from these deductions on 2019 tax returns.

Also, please share the letter with your foundation members, as they reach out to their elected officials.

The Forum is grateful to the National Council of Nonprofits for its leadership in developing both letters. Developments pertaining to legislation are happening quickly, the Forum will continue to keep you updated on its progress.

For more information about philanthropy’s response to COVID-19, please visit the Forum’s website, here .

How Changes to the Mississippi Telephone Solicitation Act (“the Act”) Effective July 1st, Apply to and Affect Mississippi Nonprofit Charities

Background: On June 3, 2019, Secretary of State Delbert Hoseman and Public Service Commission (PSC) Chair Brandon Presley emailed every registered charity in the state of Mississippi alerting them that changes to the Mississippi Telephone Solicitation Act (the Act) might require Mississippi nonprofits whose staff members make telephone solicitations to potential donors in Mississippi to register, pay a registration fee, and post a $50,000 bond with the PSC, effective July 1, 2019.

Broadly speaking, if a paid caller (whether a third party telemarketing firm, or paid staff) makes calls or sends text messages seeking a charitable contribution to persons or businesses with whom the organization does not have an existing business relationship (cold calls), then the nonprofit must register with the PSC as a telemarketer. (Calls made by volunteers remain exempt from this Act.)

Possible Exclusion from Registration: In discussions with the Public Utilities and PSC staff, we have learned there is an exclusion in the act that may exempt many nonprofits from this registration.

The Act does not apply when nonprofit staff members are calling consumers with whom the nonprofit has “an existing business relationship.” In many cases the relationship a nonprofit has with its donors and volunteers where the nonprofit provides mail or email updates and appeals for contributions would be deemed “an existing business relationship” and thus telephone solicitations to them would be exempt from the Act and its registration fees and bond. That would likely be the case with any individual who has purchased a membership or services from your nonprofit, contributed to your nonprofit several times in the past, asked you for services or registered with you to receive emails and updates. However, if your staff is making phone solicitations to individuals who do NOT have such an existing business relationship to your nonprofit, The Act would require you to register before your staff makes any such calls. Again, telephone calls made by volunteers (rather than paid staff) are exempt from this Act.

Proposed Annual Registration Fees and Bond Requirement:

The annual registration fees proposed by the PSC are as follows:

  • No fee for nonprofits who raise less than $25,000 in contributions per year. They must register but are exempt from paying a registration fee or posting a bond.
  • $500/ year for nonprofits who raise $25,000 to $50,000 in contributions per year.
  • $750/year for nonprofits who raise $50,000 to $75,000 in contributions per year.
  • $1,000/year for nonprofits who raise over $100,000 in contributions per year.

Proposed Bond: Nonprofits who must pay a registration fee, must also post a $50,000 bond, which costs approximately $500 per year.

How Does a Nonprofit Register?

If you conclude that your nonprofit is covered by the Act, and thus required to register, go to the Public Service Commission website: https://www.psc.ms.gov/nocall/forms  download and complete the Telephonic Solicitor Registration Application and The Surety Bond Agreement. These completed forms, along with your registration fee and Surety Bond must be mailed to the Public Service Commission. If your nonprofit is covered by this law, which takes effect July 1, 2019, you must NOT make calls covered by The Act on or after July 1, 2019, until you have completed your registration with the PSC for the July 1, 2019 through June 30, 2020 fiscal year.

How to Seek Guidance/Clarification from the Public Service Commission

Nonprofits with questions about this act and whether it may or may not apply to fundraising telephone calls made by your paid staff, can contact Frank Farmer, General Counsel of the Public Service Commission at Frank.Farmer@psc.ms.gov at 601-961-5821 office or 769-798-7125, cell.

Opportunity to Offer Comment on Proposed Rules

The PSC issued temporary rules and a request for comments at their meeting on June 11th  If you wish to file comment, you should send your statement to the Public Service Commission, Comments on Amended Rule 28,  501 N West St, Jackson, MS 39201.

You May Wish to Consult Your Attorney or Accountant about this Act

The information provided in this email by the Alliance is general information and does not constitute professional legal or accounting advice. You may wish to consultant your attorney or accounting advisor about how this act does or does not apply to your specific situation.

Volunteer NEMS making service connections

Tupelo  If you’ve got the time, Volunteer Northeast Mississippi has the match.

The organization, which operates under the United Way of Northeast Mississippi umbrella, provides a online home for area nonprofits and volunteers to find each other.

“We want to make it easier to connect,” said Rebecca Nelson, Volunteer Northeast Mississippi director. “It’s a partnership with United Way, CREATE and Volunteer Mississippi.”

The Tupelo-based organization is one of five hubs for Volunteer Mississippi. It covers 16 counties in this corner of the state.

“It’s not just a Tupelo thing,” Nelson said.

The Northeast hub was launched about a year ago, and Nelson came on board in January. Currently, there are 36 agencies on the Northeast hub at volunteernems.org. The service is free to volunteers and nonprofit groups, Nelson said.

Each volunteer opportunity on the site includes information about the tasks and the skills needed and contact info for the agency. If volunteers sign up through the site, the nonprofit groups get a list of who to expect. Volunteers get reminders ahead of the event. It also can help track and verify volunteer hours.

Some of the agencies have posted requests for specific events, like an April 27 color run to support Reconnect 4 Autism in Corinth. Others post ongoing needs, such as CATCH Kids, which needs volunteer medical professionals to see children at its community clinics in Pontotoc, Lee and Chickasaw counties, and Talbot House sober living for women in Tupelo, which is holding a toilet paper drive.

In addition to connecting nonprofits in the region and volunteers, the hub will also offer services to nonprofits, Nelson said. On May 23, the hub will offer a board boot camp to help nonprofit leaders function more effectively. The class, taught by the Mississippi Alliance of Nonprofits and Philanthropy, will meet from 9 a.m. to noon in the Carpenter room at the CREATE Foundation office in Tupelo. For members of the alliance, the cost is $69; for non-members the cost is $109.

“It’s open to any nonprofit,” Nelson said.

Nelson also plans to develop a category of volunteer opportunities geared for high school senior projects.

Local connection

Nelson and her husband Andy Nelson both grew up in Tupelo, but moved away as adults. They moved back to Tupelo with daughter Lindsey in 2014. Her parents, the late Jack and Mavis Cristil, instilled in her the importance of giving back and a love for Tupelo and Northeast Mississippi.

“We always knew we wanted to move back to Tupelo,” Nelson said.

In addition to connecting volunteers with opportunities, Nelson sees her role as promoting nonprofit agencies across the region.

“It’s so uplifting to be in an environment where people want to do good things,” Nelson said. “All the nonprofits (in the region) want to do more.”

April 21, 2019- This story has been correct to reflect there is a charge for the board boot camp class. 

Article originally posted in the Chickasaw Journal.

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