Pat Lewis

Staying on the leading edge: The several economies of the social sector

posted by Pat Lewis,
Senior Professional
in Residence
ASU Lodestar Center

What is the nonprofit sector’s contribution to society’s economics? This is a question often asked — but responding in true economic terms has been more difficult. Although the ‘double bottom line’ — profit and social value — have long been recognized, there are now new ways of looking at this question, encompassed in new terms: social, core, and monetary economies.

Dr. Laurie Mook, a professor at Arizona State University, defines the term social economy as:

A bridging concept for organizations that have social objectives central to their mission and their practice, and either have explicit economic objectives or generate some economic value through the services they provide and purchases they undertake. The term social economy puts up front the economic value of social organizations — that they produce and market services, employ people, may own valuable assets, and generate social value.1

Another perspective on the concept of social economy is that of Edgar Cahn, who suggests we have created two systems that are inter-related: the monetary economyand the core economy. He explains that the monetary economy is what we measure. It encompasses the income sources that drive our society: profit, government, philanthropy, earned income. The core economy, although supported by money, is not driven by it. It is “primarily powered by our minds, our spirits, our hearts.”2 It can be described as “family, neighborhood, community and civil society.”3 It is often invisible, overlooked, or unacknowledged. A dilemma is how to bring it to the fore and measure it for its overwhelming value. One way this can be accomplished is through “time banking,” which will be addressed in Edgar Cahn’s keynote address at the ASU Lodestar Center’s 20th Annual Conference on Sustainability Strategies, Oct. 18 & 19.


Research Friday: So ... What About These Numbers?

 

posted by
Pat Lewis,
Senior Professional
in Residence
ASU Lodestar Center


Welcome to Research Friday! As part of a continuing series, we invite a nonprofit scholar, student, or professional to highlight current research reports or studies and discuss how they can inform and improve day-to-day nonprofit practice.

While driving to work recently I heard an NPR report about philanthropic giving in the US; but it was not the numbers I had just read in Giving USA 2012 published by the Giving USA Foundation and compiled by the Center on Philanthropy at Indiana University. Listening further, I learned this was a report of a study just recently published by The Chronicle of Philanthropy, using data on giving from 2008.

Public Policy and SOX: Pricey or Priceless!

 

posted by
Pat Lewis,
Senior Professional
in Residence
ASU Lodestar Center


Welcome to Research Friday! As part of a continuing series, we invite a nonprofit scholar, student, or professional to highlight current research reports or studies and discuss how they can inform and improve day-to-day nonprofit practice.

It is not often that public policy intended for the publicly traded-corporate world directly impacts the nonprofit corporate world. So … when the Sarbanes-Oxley Act (SOX) was adopted by Congress in 2002, there just wasn’t much history to help nonprofits understand its impact – on them. A decade has now gone by, and, according to research by Tamara G. Nezhina of DePaul University and Jeffrey L. Brudney of Cleveland State University, a base for the future has been identified from this short period of history. Their study reviewed literature about the effect of SOX on nonprofits as well as surveys and other basic research implemented by the authors. The result of their work? The identification of intended – and unintended – outcomes that had both positive and negative impacts on nonprofits.

The goal of the Sarbanes-Oxley Act was to curb financial abuses among publicly-traded corporations. Further, it was intended to enhance transparency, which, for the nonprofit sector, is an imperative. Are these goals being achieved? And, at what price?

Research Friday: Generosity Expanded: The Impact!

 

posted by
Pat Lewis,
Senior Professional
in Residence
ASU Lodestar Center


Welcome to Research Friday! As part of a continuing weekly series, each Friday we invite a nonprofit scholar, student, or professional to highlight current research reports or studies and discuss how they can inform and improve day-to-day nonprofit practice.

Each year, through the publication of Giving USA, we learn about the generosity of Americans. In 2010, we gave nearly $300 billion in support of a wide variety of charitable causes—3.8 percent increase over the prior year. Almost all of this was given to causes within the United States. However, the 5 percent given to international causes reflected a 15.3 percent increase over the prior year, and was the largest percentage of growth among recipient areas. This level of increased global philanthropy is worth a further look. The Hudson Institute’s Center for Global Prosperity recently published its Annual Index of Global Philanthropy and Remittances for 2010 and reported “financial flows to the developing world from the United States increased notably in 2010 to $326.4 billion from $226.2 billion in 2009,”1 largely due to the improved economy. This support consists of four sources: U.S. government aid, capital investment, philanthropy and remittances. Accompanying the Annual Index is an Executive Summary. Both papers serve as resources for this blog post, which touches on only a few aspects of this global generosity. Data such as that presented in this annual study is important to track as we learn of the impact of investments such as these.

The table below highlights the billions of dollars that flowed to developing countries from the United States and the specific percentages sources noted above.

Research Friday: Financial literacy: understanding money for today’s activities and tomorrow’s security

 

posted by
Pat Lewis,
Senior Professional
in Residence
ASU Lodestar Center


Welcome to Research Friday! As part of a continuing weekly series, each Friday we invite a nonprofit expert to highlight a research report or study and discuss how it can inform and improve day-to-day nonprofit practice. We welcome your comments and feedback.

You serve on a nonprofit board of directors. Or, you are a member of management for a nonprofit organization. You are expected to understand the organization's finances. And your role (board or staff) determines how you contribute to the overall security of the nonprofit with which you are affiliated.

When those who are responsible for an organization's overall fiscal management responded to a study by The Moody Foundation, it was found that nonprofits need to "fortify their financial skills to better forecast future needs, navigate economic instability, and manage risk."1 This study, Financial Literacy and Knowledge in the Nonprofit Sector (PDF), "engaged a random sample of primarily human service nonprofits, as well as health, civic, environmental, arts, and education nonprofits."2 Again, the study surveyed nonprofit financial managers such as CEOs and CFOs.

The report is divided into five areas of study: I) financial knowledge and literacy, II) indicators for programmatic and financial decision-making, III) the board role & governance, IV) controls and procedures for financial management, and, v) some closing thoughts.

Research Friday: So, where is Bob?

posted by
Pat Lewis,
Senior Professional
in Residence
ASU Lodestar Center


Welcome to Research Friday! As part of a continuing weekly series, each Friday we invite a nonprofit expert to highlight a research report or study and discuss how it can inform and improve day-to-day nonprofit practice. We welcome your comments and feedback.

Not long ago, I had a need to find a friend, Bob, with whom I had not been in contact for a number of years. To the rescue: LinkedIn. My experience searching for Bob is concrete evidence of the helpfulness of various social networking sites (SNS) like LinkedIn and Facebook. So, I was intrigued with a report from the Pew Research Center's Internet & American Life Project about the social impact of widespread use of social networking sites.

Research Friday: Volunteering and Financial Statements - What’s Missing?

posted by
Pat Lewis,
Senior Professional
in Residence
ASU Lodestar Center


Welcome to Research Friday! As part of a continuing weekly series, each Friday we invite a nonprofit expert to highlight a research report or study and discuss how it can inform and improve day-to-day nonprofit practice. We welcome your comments and feedback.

Do volunteers count? Oh, yes, they count — in how services are performed, in how much is and can be done, and in generating social value. Volunteering is the heart and soul of the social sector.

However, the “contributions of most volunteer services are not recorded in the conventional accounting statements because they do not meet the very specific requirements of the Financial Accounting Standards Board (FASB),”[1] the entity in the U.S. that establishes financial accounting and reporting standards.[2]

For some nonprofits, this means that financial statements misrepresent the depth of effort and the breadth of support for services to clients, customers, and the community. They ask, “How can we present to our Board of Directors, our funders, and our volunteers how much value volunteering brings to our ability to carry out our mission?”

Well, to the rescue comes the work of Dr. Laurie Mook, an assistant professor in ASU’s School of Community Resources and Development and an affiliated faculty member of the ASU Lodestar Center. Dr. Mook, along with Dr. Jack Quarter[3] and Dr. Betty Jane Richmond[4], have researched the social sector for many years, as well as co-authored What Counts: Social Accounting for Nonprofits and Cooperatives.[1] Their work suggests a new way of accounting for social value.

Research Friday: Is traditional civic engagement dead?

posted by Pat Lewis,
Senior Professional
in Residence
ASU Lodestar Center

Welcome to Research Friday! As part of a continuing weekly series, each Friday we invite a nonprofit expert to highlight a research report or study and discuss how it can inform and improve day-to-day nonprofit practice. We welcome your comments and feedback.

"Citizens should seek opportunities to create and share public knowledge and discuss public issues; expect their governments to be open, transparent and collaborative; volunteer to the best of their ability; and create and share knowledge about the networks and relationships in their communities."[1]

How many times have we heard a pronouncement starting with, "Never before have we needed ____ more?" I'm not sure that never before have we needed civic engagement more, but I do suggest that reviving civic communication will contribute to healthier communities. And I could argue that such might energize a greater level of civic engagement, which could contribute to a strengthened democracy.

This thought is not original; it is outlined in a recent policy paper by Peter Levine of the Jonathan M. Tisch College of Citizenship and Public Service at Tufts University. Levine's paper, Civic Engagement and Community Information: Five Strategies to Revive Civic Communication, commissioned by the Aspen Institute Communications and Society Program and the John S. and James L. Knight Foundation, was released in July 2011 and reported in CIRCLE, a publication of Tufts University.

CIRCLE's report of the paper brings to greater awareness the importance of technology and social infrastructure in civic communication. Its premise is that "Information by itself is inert. It begins to have value for a democracy when citizens turn it into knowledge and use it for public purposes." The paper further asserts that, "To create and use knowledge, individuals must be organized. Formerly, many Americans were recruited to join a civil society of voluntary membership associations, newspapers, and face-to-face meetings that provided them with information, encouraged them to discuss and debate, and taught them skills of analysis, communication, and political or civic action. That traditional civil society is in deep decline."[2] [emphasis mine]

Five recommendations for reviving civic communication are proposed in the report. To summarize:

Strategy 1: Infuse in the infrastructure of national and community service programs the requirement that participants learn civic communication skills. 

How to Start a Nonprofit Organization: Questions to Ask Yourself Before You Make the Leap

posted by
Robert Duea,
Professional in Residence
ASU Lodestar Center
and
Pat Lewis,
Senior Professional
in Residence
ASU Lodestar Center

So, you're thinking about starting a nonprofit organization. You have a fantastic idea, but are you ready? Do you have everything you need before you begin? Is starting a nonprofit the right path for you?

Before you begin your nonprofit journey, you should ask yourself two very important questions. So, let's dive in, and see if you're ready!

1. "Why do I want to start a nonprofit organization rather than a for-profit organization?"

Both types of organization could be the right choice for you. After all, both are businesses, and both can help you provide the service you want to share. So, what is the difference? There are a number of similarities and differences. Here are few:

  • Nonprofit organizations are concerned primarily with social good; for-profits focus on profitability.
  • Nonprofit organizations must adhere to a rule of non-distribution whereby profits, or any excess at the end of the fiscal year, must be re-invested in the organization and its programs and may not be distributed to individuals; for-profits exist to distribute profit to owners and shareholders.
  • Nonprofit organizations comprise paid staff and volunteers; for-profits typically only have paid staff members.
  • Nonprofit organizations are governed by a board of directors; for-profits are governed by the owner(s) and, if a corporation, also a board of directors.
  • Nonprofit organizations are granted federal exemptions of certain taxes; for-profits are taxable.

These are a few of the key differences that can help you make the right choice for your organization. So, let's say you've chosen the nonprofit route. The next question you should ask yourself is:

Research Friday: The Board Chair and the CEO: When is a Team Relationship a Team ... Really?

posted by Pat Lewis,
Senior Professional
in Residence
ASU Lodestar Center

Welcome to Research Friday! As part of a continuing weekly series, each Friday we invite a nonprofit expert from our academic faculty to highlight a research report or study and discuss how it can inform and improve day-to-day nonprofit practice. We welcome your comments and feedback.



"None of us exists independent of our relationships with others. In each of these relationships we are different, new in some way." [1]

The relationship between a nonprofit Board Chair and the CEO is an incredibly important one. I have found no studies that dispute this. In fact, it ought to be a fun, exhilarating, rewarding experience for both members of this important leadership team. So, are we accomplishing this goal?

ASU is a research university that puts significant effort into true academic research. However, there are times when simple surveys produce very meaningful information — and can provide the basis for deeper research projects. And it is a simple (and small) survey upon which this blog is based.

The Organization for Nonprofit Executives (ONE) recently performed a survey of its members to help gather information for my presentation on the Board Chair/Chief Executive relationship. Thirty-two CEOs responded, and the results were extremely informative, leading to the greater question of how often this relationship is fun, exhilarating, and rewarding. The answer? For the CEO, not as often as one might imagine.

When asked their feelings about this relationship, approximately 1 in 4 CEOs responded with very positive statements (paraphrased) such as:

  • Chair is supportive and helpful.
  • The challenge? Keeping up with the Chair.
  • Chair is very busy, but very accommodating.
  • Relationship built on mutual trust and respect.

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