Friday, October 29, 2010

Nordstrom Opening Non-Profit Store!

I was thrilled to read in the Chronicle of Philanthropy today that Nordstrom (whom I'm written of before) is opening a store in NYC that will give all profits to non-profit organizations. This is a huge experiment in the retail world, and if it works for Nordstrom, it could cause other stores to follow suit.

I've said before that stores themselves should function more like a non-profit does, but honestly this sort of model never really occurred to me. Nordstrom will use this store to learn more about New York retail, because it lacks a flagship store in the city, so while they might not be filling their coffers, the store will still help them expand and profit in the future.

Sadly, the stores will not be actualy Nordstrom stores; they will have a separate identity and branding from regular Nordstrom's or Rack stores. But, still. Its a good start!

Sunday, October 24, 2010

How the HECK to deal with In-Kind Contributions in Accounting

I'll be the first to admit that accounting befuddles me. I consider myself to be a smart person, and I can create a GoogleDocs spreadsheet to track expenses and revenues, even making deductions red and income black. It's pretty nifty.

Because of this, I hoped I could handle the books for my non-profit, at least while it was fledgling. I ordered Non-Profit Bookkeeping and Accounting for Dummies off Amazon, and once it arrived, I dove right in.

I lasted about 10 pages.

Seriously, why would you put in items twice? To do accounting everything has to show up in two books, one positive and one negative. I just couldn't make it work in my brain. So I've resigned myself to having to pay for bookkeeping services. Whatever.

But what about in-kind contributions? Because I don't yet know if my organization is viable, we don't have a bank account yet, I've been buying materials out-of-pocket and then considering them as in-kind.

But I can't put them on my spreadsheet! They need a different one. Because I can't put the cost of brochures in red because then the NLS will look like its in the red; but its not, because it didn't pay for the item. I can't put it in black because it looks like the NLS has $26 hanging out in a bank account, but it doesn't, it is at exactly $0.

I have a feeling all this will be easier when we have an accountant. You know, like 10 years in the future. Sigh.

Friday, October 15, 2010

Humanitartian Aid for Good, not Evil

I read an interesting blog post in the Chronicle of Philanthropy recently reviewing a book by one Linda Polman of her book, The Crisis Caravan: What’s Wrong with Humanitarian Aid? I saw her interview on the Daily Show recently as well, and I'm surprised that more people aren't more concerned.

Basically, she argues that humanitarian aid to places like Sierra Leone, Rwanda, Sudan and many other places all over the world actually has the effect of worsening the crises in those locales. For example:

"Ms. Polman says money for famine relief in the 1980s in Ethiopia helped pay for the government’s relocation of dissident peasants against their will. She says nonprofit programs to buy the freedom of slaves in Sudan drove up demand for slaves, leading their captors to seize more people. During the Rwandan genocide, she says, perpetrators were given food and shelter by refugee camps in Eastern Congo, enabling them to continue their campaign of rape and violence."

So my questions are probably the same as anyone else's: what does this mean? Do we stop giving aid to these poor people? Is there a way to provide aid that doesn't help those perpetrating the harms? Also, does providing this aid make the victims less likely to stand up and fight? I suspect not, because if you've been raped, your family killed and your house burned down, I don't think a few medical supplies or a square meal will make you suddenly complacent. In fact, I think that providing this aid must hearten those victims, increasing their desire to fight back because they know at least someone is behind them.

So there must be a way to do it. But how? Is more oversight the key? Absolutely. I think this is one of those cases where creativity and the freedom for groups to experiment in finding new ways to help people come second to being accountable to results. If the indication is that your aid is helping the pillagers, you must be expected to change your program NOW. And freedom and creativity have a place in that. But there must be swift accountability first and foremost.

What do ya'll think?

Tuesday, October 12, 2010

Embarrassing Facebook Pictures! Oh, and the workplace.

No, I'm not posting any. ;)

But its become an all-too common concern in this workaday life: All those good college times catching up with you when a prospective employer sees that you binge drank (or worse) in college (or worse, last night) and throws your resume in the trash.

And now MSNBC's Technolog, in an entry riddled with typos, tells us that even if an image is deleted, it can remain accessible for months, even years, out there in Facebook servers. Sure, you have to have a direct link to the photo to pull it up, its not just on your photo album page, but "still."

Here's what I think about this whole thing: Get over it.

Pretty much everyone who goes to college does stuff they regret. That's sort of college's "thing." And I don't care who your social group is, every one of them has a friend who dabbles in photography or at least has a camera with them at every event they attend. There will be pictures of you on Facebook, and if you've ever done something compromising, there will be a picture of that too.

My question is, how do employers find people who DON'T have compromising pictures of themselves on Facebook?

Sure, they can stick with hiring older people, but that's not a long term strategy. Facebook is here to stay, and its fun and point are significantly diminished if you're constantly bleaching it for fear of a potential employer seeing it.

My advice? If you're going to take a rip off that bong, you should probably not take a picture, because its stupid to take pictures of yourself doing illegal things. But if its legal, I say keep it up there, set all your privacy settings so that only friends can see your information and pictures, and create a LinkedIn account for your potential employer to see your bleached side.

Ultimately, people should be able to post pictures of themselves doing a kegstand without fear, because one's ability to create spreadsheets and give a good speech have little to nothing to do with one's ability to kegstand. And maybe if enough people keep those pics up, employers will realize that Facebook is not a good way to evaluate a candidate. It sure would be nice.

Interesting facts re: Lehman Brothers, College Funding and Contracts

I read an interesting article today courtesy of the Chronicle of Philanthropy about how colleges are feeling the pinch in this dread economy, seeing declines in new pledges as well as many previous pledges falling through or being reduced. Some colleges have even been getting into a little trouble because they start buying or building based on a pledge that is later reneged. The opener:

"The $10-million pledge to Spelman College came with big plans.

The historically black women's college would take the money—the largest corporate donation in its history—and create a pipeline to Wall Street for black women, preparing them for international-finance careers by offering new courses, internships, and Chinese-language instruction. The program's home would be called the Lehman Brothers Center for Global Finance and Economic Development.

When the gift was announced with great fanfare, in 2007, no one imagined the investment bank's eventual collapse. The college would receive just $3-million of the original pledge­—enough to start a Chinese-language program but not enough for the rest."

Oh, cruel fate. At least they got a Chinese program out of it, though!

One thing I found particularly interesting is that a pledge agreement between a college and a donor is a enforceable contract, meaning that the College can take legal action against donors who back out. But they "rarely, if ever" do so, because being a jerk to someone who offered to give you money is kind of a dick move. Of course, if you're halfway through building that new law school and the wealthy financier who pledged the other half is reneging, not necessarily because he is no longer wealthy but because he is less wealthy, what is a college to do?

Times like this I sorta wish we had a more European system, where colleges are often state-owned enterprises and don't need to be panhandling their alums all the time. But on the other, I don't know that it's such a bad way to do things. Getting alums to contribute after they graduate is tough, but the work starts as soon as that kid walks into the hallowed halls his freshman year. Most people I know that refuse to donate to their colleges do so because of things they feel the college did to them, back when they attended. Basically, if you do a good job providing a good education and a good community, you'll reap the benefits in alumni contributions. And if you believe you got your money's worth out of your education, and want to express your loyalty, giving is a great way to do it.

Oh, and BTW, its not necessarily those huge gifts that colleges appreciate the most. In fact, what may be more useful to them is their alumni giving percent, the proportion of their total alums who give a gift of any size. That number is used by folks like the Princeton Review and others when they do their big rankings and publish them. Those books are very influential with potential students, and even a claim like being the Best Educational Value in the Northwest is something you can pop on a postcard and mail to prospective students in Idaho.

If you think you got a good education, give your college $5. They'll appreciate it, trust me!

Sunday, October 3, 2010

Two Views on Corporate Philanthropy (HINT: Both involve turning a profit)

I've been reading a fine interview by Caroline Preston over at The Chronicle of Philanthropy of Citigroup's CEO, Vikram S. Pandit, about Citigroup's views on corporate philanthropy.

If you recall, a few weeks ago I discussed another model of corporate philanthropy promoted by an editorial at the Wall Street Journal. Basically, his position was that unless you specifically engage in philanthropy (with company, and thus shareholder, dollars) with the intent to make money (people like the idea that you're such a good company and are thus more likely to give you their business), you are stealing from shareholders. The way he illustrated it:

"Suppose you own a company that you do not want to manage. You hire a manager, pay him a salary, and one day you discover that he has transferred $100,000 to the bank account of an external party that has provided your firm with no goods or services. If the account belongs to the manager, or one of his relatives, he is clearly a thief. But what if it belongs to the manager's favorite charity? Then he is still a thief because the money is not his to give; it is yours as the owner. He cannot defend his action on the ground that you would have willingly given $100,000 to the charity. If that were true, then why not simply disperse the $100,000 to you as profits and allow you to make the donation yourself?"

You can see the argument, and to a large extent, I agree with it. Basically, the only way its not theft is if that money comes back to you in the form of increased business, and that has to be the intent when the money is given.

Citigroup has a little bit different of a perspective.

"There are philanthropic aspects to some of what one can do. But this is really about sustainability. How do you develop sustainable models of financial inclusion? That is a fundamentally different approach. If we bring everything we know about finance and our systems and our smart people together, we can figure out how to create a business model around financial inclusion that can even create a little bit of a profit. There has to be some aspect of philanthropy, which is seed money or start-ups or experimentation. But to make them sustainable, they need to be grounded in basic business theory, business models. Microfinance is a perfect example of that. It’s something that does great for people who are not part of the lending system, but also it can be profitable."

So basically, Citigroup likes to engage in philanthropy by providing seed money to entrepreneurs. But they also seek to help those entrepreneurs find ways to have a sustainable and profitable business model, so that Citi can get that seed money back, plus a little interest.

But, asks the Chronicle of Philanthropy, "Aren’t what’s most profitable and what’s best for society often at odds?"

"There could be some people who believe they’re at odds. But this is so squarely in the pathway of our purpose, our mission, that it’s not incongruent with what is right for our shareholders. The primary goals of our foundation and our community efforts is to drive financial inclusion. How can that be bad for shareholders on any long-term basis? I don’t see that."

So basically, Citi's version of philanthropy is doing what they do anyway, only attempting to make some of their money available for people or groups that would otherwise not be able to get a piece of the pie, and giving them more help with business models and sustainably. And they have a separate budget for this, a philanthropic budget.

So my question is: wouldn't it be better if they ran like half their business loans this way? I mean, I feel part of the problem is that for the average entreprenuer business loans are a little out of reach because you have to do all kinds of research and business modelling before you get that money, which you really don't know how to do unless you have an MBA yourself. So you have to pay people to help you. Is their philanthropic program simply for people who can't afford to pay experts for those steps? I can see the value of this, don't get me wrong, and I think it would be great if someone with a great idea could simply go to a bank, tell them the idea, and say "How can you help me make this happen?" Maybe there is another subsection of the economy that provides this service, but to me it makes sense that a bank would provide free (or "free" as in built into the repayment of the loan) business consulting services for all its customers. This would make small businesses much easier to start, and the government wouldn't have to have anything to do with it.

What do ya'll think? Is this charity or just good business. Can it be both?