Begin Wrap up of Material and Introduction of Final Project Meeting #9 Begin Wrap up of Material and Introduction of Final Project

Analysis of American Red Cross Post 9/11 Example of organization that temporarily lost its focus and road off the rails Can be attributed to management structure that allowed for too much autonomy at local level Same problem that haunted United Way in its recurring scandals with local chapters

Post 9/11 – Donations Pored In Funds were in excess of what could ever be distributed to victims $564 million by one count Set up three temporary shelters Became apparent fairly quickly that there were few, if any, survivors What does an organization do with $564 million if relief not needed?

Other Major Issue…… Much of money given to local chapters Proper controls not in place to make sure that money funneled to 9/11 causes – much of it wasn’t Local organizations were “coding” funds so as to keep them for local causes Donors (obviously) felt used

A Structural Problem Created by Attempt to Cut Costs Local chapters were largely independent Management (national) poorly supervised locals Was followed by a number of scandals at the local level Particularly a problem with the Hudson County (NJ) chapter in 2001 Excessive bonuses paid out of contributions Red Cross has set out to address these issues, but issues remain

A Structural Issue that we have not Looked at Yet… Dispersed management structure in large nonprofits may lead to loss of control Post-1992 scandal at United Way – many additional problems at local chapters

Final Project – First Steps Identify a cause within the charitable sector that you want to focus on Use Charity Navigator as a guide – CN’s categories are very broad – you will have to narrow it down Locate a small- to medium-sized charity within that sector (giving less than or equal to $5million/year) The charity must be ranked ** or *** i.e. it has some “issues”

Nonprofits that are not Appropriate Community Foundations Mott Foundation, for example Member-Serving Organizations Hospitals, schools, social “clubs” (POE), Churches Political and civic organizations (501(c)4s) Chambers of Commerce (501(c)6s)

Collect the Following Information: Objective measures of the charity’s effectiveness (e.g. program expenses over total expenses) Sources of funding Details on all types of funding and their effectiveness Grants, contributions, Fees, Fundraising events How does this mix affect the perceived “effectiveness” of the nonprofit Management structure Examine Form 990 for the nonprofit Details on how the nonprofit accomplishes its work Complement to other programs? Determine why it is ranked below four stars

Should use both CN and website of nonprofit There may be other web resources for some nonprofits Economic impact studies Determine what would make the organization more effective Address why it is a ** or *** star organization, and what it would take to fix that

Economic and social impact of organization Determine – as best as possible – where the nonprofit’s impact is felt e.g. housing, medical care Poor communities, rural communities, or some other specific population Investigate what programs the federal government has to address same issue(s) Briefly consider how this charity complements what the government does (or doesn’t it?)

Literature that Might Help Hatry, H.P. ( 2006). Performance measurement: Getting results (2nd ed). Washington, DC: Urban Institute. Schlesinger, M., Mitchell, S., & Gray, B. ( 2004). Measuring community benefits provided by nonprofit and for-profit HMOs. Inquiry, 40, 114- 112. http://www.nationalassembly.org/uploads/documents/webinars/non profitorganizationaleffectiveness.pdf

Measuring the Economic and other Impacts http://www.calnonprofits.org/images/downloads/causes-count- 719.pdf

Final Project – Further Details Create a nonprofit that addresses the same need that is addressed by the charity you examined Describe its structure Management, stakeholder roles, oversight Detail how your nonprofit will have the maximum impact Sources and uses of funds Leveraging of donations

Final Case Study

Final Project Economically impactful donations