Jeff Trexler: November 2007 Archives
Readers may recall the story from Brooklyn involving strippers who volunteered to help distribute candy at a charity event, only to be banned by the organizers. The response of the organizer of the Chilean campaign--Sabado Gigante star Don Francisco:
Speaking about Maria Carolina's unusual donation, campaign organizer Mario Kreutzberger said he would not encourage "immoral" activities, but said he would accept her pledge.
"Everyone can do what they want, but if someone tells me that they'll do something immoral ... I'm not going to encourage it," Kreutzberger, who as "Don Francisco" hosts the long-running "Sabado Gigante" program on the U.S. Spanish-language Univision network, told local media.
The prostitute herself raises an interesting defense:
"There are people who are going to be donating money that's a lot more questionable than mine," she said. "The only thing I did was publicize it."
If you're using video to promote your enterprise, it never hurts to feature a celebrity model--or a bizarro celebrity!
For more info on Gelila's cause, check out Charity: Water
If you don't get the reference in the "bizarro" link, watch the original version on which the Dr. Pepper parody is based. What's so fascinating for me about artist Tay Zonday's trajectory is the speed with which social consciousness metamorphosed into viral comedy and now ironic marketing. Used to be that sort of thing took thirty years!
Another excellent question I've received: If a person donates property to a charity, how much can they deduct? The scenario that sparked the ask: an artist donating her art to a church for it to sell. She can deduct the price the art sells for, right?
Artists can only deduct the cost of the items used to create art of their own that they've donated--and if they deducted those items as a business expense, they can't deduct 'em again as a charitable deduction! The same thing goes for donations of personal papers. You also can't deduct the value of your time--for example, I could not deduct the value of free legal consultation to a charity, nor could a carpenter deduct the value of time spent helping to build a house with Habitat for Humanity.
But what about gifts of property more generally? Let's say the church member donated someone else's painting or some jewelry or stock?
Charitable business has been in the news quite a bit, and once again the fact that charities don't pay taxes on much of that business is attracting a fair bit of negative attention, especially from commercial competitors. We can expect the complaints to grow louder as the economy gets worse.
I've been asked to provide a brief overview of UBIT. Since it was just my dumb luck to get sick I've decided to set aside the podcast format for a day or two and set the answer out in writing.
Click below for more:
Transparency is one of the watchwords of corporate ethics in the charitable community. The assumption is the more we know, the less we allow bad things to thrive--"sunlight is the universal disinfectant" and all that.
Yet as we've seen time and time again, transparency only works if people understand what they see. Enron provides a telling example: their instability was laid out for all to see in their quarterly reports . . . if you had the expertise and patience to parse through the details.
The same is true when it comes to nonprofit tech. Convio, a firm that provides nonprofit donation management services, is getting hit for their handling of a security breach in which someone obtained its clients passwords, email addresses and other personal information. But as Allen Benamer observes in his Nonprofit Tech Blog--which, as the New York Times indicates, has become a hub of information and insight re l' affaire Convio--the potential for exposure to a security breach was in plain sight all along.
The telltale part: the ability to retrieve your password. Key passages below:
What is distressing is a defense of Convio by a marketer on the progressive exchange e-mail list who is claiming â€œthat GA was usingâ€¦ state of the art anti-hacking tactics.â€ We really donâ€™t know that yet and unencrypted passwords are truly NOT state of the art anti-hacking tactics. . . . And those of you who have survived this breach with not having to contact constituents, should immediately rescind the â€œprivilegeâ€ of e-mailing members with their old passwords if they forget them and just create a random new password for them to login with instead.
Basically, in order to make sure that single sign-on was possible, GetActive gave users the ability to dump unencrypted passwords en masse from the system so that a nonprofitâ€™s GetActive users could be synched with a â€œforeignâ€ system. . . .The idea that there are text files out there with my username and unencrypted password on them is really annoying. This practice has to end now for all vendors selling nonprofit solutions.
My fellow nerds, geeks, and accidental techies, please be sure to tell your not-so-technical co-workers that they can no longer expect to be e-mailed their old passwords just because itâ€™s more convenient. It was always bad practice and in a case where sometimes we can pressure vendors to accoomodate us, it was a doubly bad idea.
CALVIN Klein is destroying his own ad in the name of art. To help promote the Dec. 1 opening of the New Museum on the Bowery, Klein allowed the institution's advertisers to drip oozing pink paint over his Houston Street billboard of Lara Stone and Jamie Burke wearing his jeans. The label, along with Julianne Moore andMaggie Gyllenhaal, will host an intimate soiree tonight at the museum, and the hot pink ooze will drip down the billboard until Monday.
One thing that gets me every time I'm asked about this sort of thing is the assumption that this sort of thing is new, that it never happened before. Nahhhh. Five hundred years ago, a wealthy merchant would pay for vestments, sponsor religious artwork and get himself (or his mistress!) drawn into the pictures. Now it's a museum integrated with two half-dressed people pretending to make out, but those are just incidental details.
And it's not as if the religious wasn't replete with naughty bits.
Class meetings today, so no podcast. Â Tomorrow's will cover the topic in the title of this post. Â Until then, by special request, here are the core documents.
A few years ago the Smithsonian honored Martha Stewart in an exhibit.
(My opinion about the Showtime-Smithsonian venture? I'd be all for it if it meant that Dexter could travel through time!)
The Wall Street Journal today has an op-ed criticizing Nancy Pelosi's attempt to spike a proposal to make employers immune from federal civil-rights lawsuits for requiring workers to speak English.
What prompted this proposed amendment?
The EEOC's lawsuit against the Salvation Army, which fired two clothes-sorters for failing to adhere its English-only policy.
Now some of you might wonder, aren't charities already supposed to be free from lawsuits under the doctrine of charitable immunity?
Short answer: Not this kind of lawsuit, and more generally, not as much as you think.
Charitable immunity is a state-law doctrine--it has no bearing on an organization's liability under federal law, including federal anti-discrimination law.
Beyond that, charitable liability is not an absolute absolution from all liability. Generally, charities in states that recognize charitable immunity protect charities from liability due to the negligence of their employees. (The level of protection does vary; some states grant total immunity; others merely limit it.)
Note that I said "charities in states that recognize charitable immunity." Not all states do, and last I knew, New York was one of the exceptions.
Why would a state not choose to recognize charitable immunity? Historically, attempts to limit or eliminate the doctrine have followed some egregious incident of perceived wrongdoing, such as medical malpractice or, more recently, the sex scandal in the Catholic Church.
Although charitable immunity is not a federal law, Congress has extended limited protection to volunteers under the Volunteer Protection Act of 1997. Click here for a brief overview of its main provisions.
IRS model articles of incorporation
Delaware Certificate of Incorporation: A Non-Stock Corporation
New York model not-for-profit certificate of incorporation
Forming a Not-for-Profit Corporation in New York State
From the LA Times, via Defamer:
Even tweens are hip to the importance of altruism. Last month, Variety launched a nonprofit initiative to highlight junior Hollywood's philanthropy and sponsored a Power of Youth event that drew [Dakota] Fanning, Miley Cyrus and Raven Symone.
"In Hollywood, there are bright, young kids who understand social issues like global warming," [Howard Bragman, founder of Fifteen Minutes PR, a Los Angeles public-relations firm that specializes in crisis management] says. "In Washington, there's a 60-year-old guy making fun of it."
"We're restructuring the organization, but we hope to reschedule Paris' trip for next year," says Maria Bravo, co-founder of Playing for Good. "I don't think she will stop going to clubs. But hopefully, she can combine doing good with fun and not drinking and driving."
Still, while it's easy to poke fun, strategic altruism is indeed both good PR and a way for the emerging generation of celebrities to find meaning in a life that can seem unreal.
12/3/07, p. 72
This week in my nonprofit law class: a look at the not-so-wonderful world of UBIT, the unrelated business income tax.
And just in time for it: a nifty New Yorker survey of the contents of NYC museum gift shops. The article: "Art and Commerce," by Patricia Marx. It's not online yet & it has, well, pretty much nothing in the way of legal analysis, but once you grasp the basics of UBIT the stuff in the article makes a lot more sense.
You wanna know another secret?
No, not icky germy growth, but that's part of the reason why waste disposal is so valuable--and a major reason it shouldn't be ignored by folks who self-identify as social entrepreneurs.
Evidence of the emerging sanitation, um, movement: the first conference of the World Toilet Association, a nonprofit trade group "hoping to spark a sanitation revolution that will save lives through better hygiene and break taboos about what happens behind closed bathroom doors."
Dr. Shigeru Omi, western Pacific director of the World Health Organization, said 1.8 million people die annually due to diseases related to inadequate sanitation, 90 percent of them children younger than 5.
Providing healthy bathroom facilities worldwide would cost some $10 billion a year -- equal to 1 percent of world military spending or what Europeans annually spend on ice cream, he said. The new association aims to provide toilet facilities to impoverished countries, provide for urgent sanitation needs after natural disasters and spread information and technology for improving toilets.
The South Korean government has given strong backing to the World Toilet Association, which has been spearheaded by the country's "Mr. Toilet" -- parliament member Sim Jae-duck. He earned his nickname for improving public restrooms for the 2002 World Cup as mayor of Suwon city.
"The restroom revolution will provide hope and happiness to mankind," Sim told delegates.
Another reason why toilet tech is sure to boom: current mainstream waste disposal and processing techniques are incredibly inefficient. Forget about your carbon footprint--if you want to be truly green, you need to know your pee-print:
The problem with urine is that it is the main source of some of the chemical nutrients that have to be removed in sewage treatment plants if they are not to wreck ecosystems downstream. Despite making up only 1 per cent of the volume of waste water, urine contributes about 80 per cent of the nitrogen and 45 per cent of all the phosphate. Peeing into the pan immediately dilutes these chemicals with vast quantities of water, making the removal process unnecessarily inefficient.
To be fair, if you use conventional western plumbing there's not an awful lot you can do about your personal pee-print right now. A lucky few, however, live or work in one of the buildings in continental Europe where you can find a future must-have eco-accessory: the urine separation toilet. These devices divert urine away from the main sewage stream, allowing the nutrients to be recycled rather than treated as waste. They could solve all the environmental problems associated with urine and even turn sewage plants into net producers of green, clean energy.
If you insist on giving green, at least make it fun.
F'r instance, here's something that would make a cool gift for teen kids of surburbanite friends: the Eco-Terrorist tee from Ban T-shirts.
The New York Times Style Section has a fun article today on "the new Grinch"--the family member who insists on giving green.
Not green as in money, of course, but eco-friendly. In short, "[t]his Grinch . . . is not out to spoil Christmas, but merely to use it as a platform to advocate ecological responsibility."
One way to look at the issue appears in the musings of the Grinches in question: namely, we are in a transitional period from older materialism to sustainable gift-giving, a cultural moment that may require a bit of sensitivity and compromise.
Or perhaps something else is at play.
Could it be that the sustainability movement serves less to save the earth than to promote the superior virtue of its proponents?
The social enterprise movement is primarily a secular phenomenon, at least in its prototypical rhetoric and associative networks. But like so much of modern charity, hybridizing business and public benefit is a practice that has deep religious roots as well as parallel religious tracks.
Example #1: BAM, the Business As Mission movement. This has close parallels with the wing of the social enterprise movement that is trying to infuse profit-seeking business with charitable values, whether through cause-marketing, corporate social responsibility, a socially beneficial purpose or the dedication of profits to a charitable cause. Does any of this sound familiar?
The phenomenon has many labels: "kingdom business," "kingdom companies," "for-profit missions," "marketplace missions," and "Great Commission companies," to name a few. But observers agree the movement is already huge and growing quickly. BAM "is the big trend now, and everyone wants to say they're doing it," says Steve Rundle, associate professor of economics at Biola University. Rundle authored Great Commission Companies (2003) and has an upcoming book, An Overview of Business as Mission, written with fellow BAM scholar Neal Johnson.
The BAM model affirms that business is a Christian calling; that free-market profit is rooted in the cultural mandate; and that rightly done, "kingdom businesses" offer economic, social, and spiritual help to employees, customers, and nations. Big start-ups are often financed by wealthy Christians who expect financial rewards and ministry results. Small start-ups, called microenterprises, use small loans to achieve more modest ministry and profit goals. Some efforts, like Yeager Kenya Group, Inc., fall somewhere in between.
Example #2: Entrepreneurial megachurches
An analysis by The New York Times of the online public records of just over 1,300 of these giant churches shows that their business interests are as varied as basketball schools, aviation subsidiaries, investment partnerships and a limousine service.
Indeed, some huge churches, already politically influential, are becoming catalysts for local economic development, challenging a conventional view that churches drain a town financially by generating lower-paid jobs, taking land off the property-tax rolls and increasing traffic.
But the entrepreneurial activities of churches pose questions for their communities that do not arise with secular development.
These enterprises, whose sponsoring churches benefit from a variety of tax breaks and regulatory exemptions given to religious organizations in this country, sometimes provoke complaints from for-profit businesses with which they compete . . . .
Crunchgear raises an intriguing question about online charity and privacy:
In discussing several things with my brother this Thanksgiving weekend . . . he brought up something Facebook-releated. See, he doesnâ€™t join groups promoting a cause (â€FreeRice,â€ for example) because he doesnâ€™t want to be seen leaving the group later on, privacy settings@ notwithstanding.
What, you donâ€™t support feeding starving people anymore, you jerk?
@Itâ€™s a social phenomenon. How do you show your support for a cause on Facebook without later being seen retracting your support? @Itâ€™s something I think needs addressing, along with the pocket veto, a term I coined some time ago describing friend/group/whatever rejection without rejection.
Are all charitable organizations considered NGO's by definition?
That's an excellent question, not least of all because of its final two words. Â Precise definition is one of the keys to law--when Bill Clinton said "it depends what the meaning of 'is' is" he may have seemed too clever by half, but he was talking like the lawyer he is. Â Â
Whatever that may mean.
Anyway, back to the question. Â The answer depends on how we define our terms. Â
In this instance, all charities are NGOS, since 501(c)(3) does not encompass the federal government, states or their political subdivisions. Why doesn't 501(c)(3) apply to governments? Â In a nutshell, commentators point to three reasons:
- Our constitutional structure does not allow states to be taxed.
- The tax code does not define the scope of taxable entities to include sovereign political entities.
- A government's power to tax, power of eminent domain and police power go beyond the purposes specified in 501(c)(3).
That may seem to be a clear enough answer, but the devil's in the details. Â Although 501(c)(3) does not encompass governmental units, there are nonetheless a bunch of separately organized governmental organizations that can qualify as tax-exempt under 501(c)(3). Â A few common examples (assuming they're organized the right way) include public libraries, public hospitals and state universities. Â
In fact, one of the country's largest charities--the American Red Cross--is chartered by an Act of Congress and also recognized as exempt under 501(c)(3). Â It is what some would call a GONGO, or government organized nongovernmental organization.
Which leads to another answer to our main question. Â There are a number of folks who see governmental involvement to be inherently contradictory to being an authentic nongovernmental organization. Â From their perspective, an organization created by or working for the government is not an NGO, at least not in the sense of being a voluntary organization formed outside the sovereign political structure. Â That means a charity could be exempt under 501(c)(3)--or, more globally, be a nonprofit serving a public purpose--and yet not fit their definition of what constitutes an NGO.
What's the right answer?Â
I don't think there is one. Â Terms such as nonprofit, charity and NGO are inherently contingent--their particular meaning depends on their immediate context. Â
Case in point: Â the very fact that American corporate law tends to use the term "nonprofit" or "not-for-profit" while NGO prevails in the context of international associations and public interest work is itself a historical accident. Â "Nonprofit" form reflects its origins in a reaction against industrial-age commerce and the accumulation of capital, while the term "NGO" reflects a twentieth-century reaction against provincial nationalism and authoritarian political sovereignty. Â Â
So here's your takeaway:
Is every charity by definition an NGO?
It depends what the meaning of "is" is!
BONUS RESOURCE: Â For more information on this topic, hearty souls may want to consider the helpful summary provided by Jody Blazek and David Nelson in the September 2006 Exempt Organization Tax Review: Â "When Can a Governmental Organization Qualify as a 501(c)(3) Organization and What is the Tax Reporting Consequence?"
A look at how a sense of virtue can blind people to vice. But funnier than the way I say it.
It takes a lot to leave me speechless.
At halftime of the Jetsâ€™ home game against the Pittsburgh Steelers on Sunday, several hundred men lined one of Giants Stadiumâ€™s two pedestrian ramps at Gate D. Three deep in some areas, they whistled and jumped up and down. Then they began an obscenity-laced chant, demanding that the few women in the gathering expose their breasts.
Youtube has several decidedly NSFW videos of what is apparently a Jets halftime tradition: intimidating women into exposing themselves. The men surround a target, shout at her and throw things if she refuses to oblige.
Security says that stopping this would violate the thugs' free speech rights.
Security is wrong. The First Amendment does not protect assault. If the Jets' management does not shut this down at the next home game, they deserve the lawsuits that are sure to come now that this has hit the Times.
Whenever I tell folks in the social enterprise that I think the time may be turning against their hybrid model of charity, the reaction is typically disbelief.
This year, for instance, the U.S. Treasury will be receiving about $40 billion less than it would if the tax code didn't allow for charitable deductions. (That's about the same amount the government now spends on Temporary Assistance for Needy Families, which is what remains of welfare.) Like all tax deductions, this gap has to be filled by other tax revenues or by spending cuts, or else it just adds to the deficit.
I see why a contribution to, say, the Salvation Army should be eligible for a charitable deduction. It helps the poor. But why, exactly, should a contribution to the already extraordinarily wealthy Guggenheim Museum or to Harvard University (which already has an endowment of more than $30 billion)?
(from Is Theater Really a Charity? by Robert Reich)
Worth noting: Reich's emphasis on wealth and quid-pro-quo exchange versus the traditional understanding of charity as poor relief. Reich's op-ed points to where public policy is likely to shift, particularly if there's a recession.
Or "Dahran," as it's called in the latest issue, which has Thor's alter ego, Dr. Don Blake, working there on a humanitarian mission with Medicins san Frontieres. The story makes a point that any number of us in the do-gooder community would do well to learn: while outside assistance can be useful, for change to be sustainable it must come from within.
Gave a presentation on social enterprise last night to a lively and engaging class. One student raised a question as to how to whether a certain company qualified as a social enterprise, and I gotta admit, that's always a great question to get.
Because, truth to tell, I think the distinction is artificial--or at least it should be.
But more on that later. For now, here's a video from an amazing archive of New York City vids: a live performance of Grandmaster Flash and the Furious Five singing their landmark "The Message."
What does that have to do with the increasingly blurry line between social enteprise and, uh, I dunno, antisocial enterprise?
Watch, listen and think about it:
Last night in my nonprofit law class we had a discussion of deductions, illustrated by IRS Publication 526. Here's what we looked at up on the big screen:
Publication 526, section-by-section links
Publication 526, complete PDF
More on 8282 & 8283 over the next couple weeks--oh caloo calay!
The World Trade Center block is the site of two urban tragedies. One was the attack on the twin towers in 2001; the other, the razing of Washington Market in 1967 to clear the space for the towers' construction.
What was Washington Market? Back in the day, "the largest wholesale produce market in the United States," as well as a retail extravaganza. Now, of course, the area is more or less sterile--the Fulton Street Fish Market is gone and groceries are practically nonexistent, except for, say, a so-called Amish market replete with on-the-grid refrigerators and florescent lights. The result is a downtown that despite an abundance of financial wealth--except for, you know, university professors--is socially impoverished.
But that may soon change.
OK, not to be a grinch or anything, but there's a slight problem with the promotion for the One Laptop Per Child buy-two-give-one for $399 special. The concept is good--you get to keep one, and you get a tax deduction for donating the other. Here's the legal language from the site:
OLPC Foundation is a tax-exempt U.S. charitable organization. If you make a donation to OLPC Foundation and do not elect to receive an XO laptop, your entire payment will be treated by OLPC Foundation as a charitable contribution. For participants in the G1G1 initiative, to the extent your payment exceeds the fair market value of the XO laptop(s) you receive, you may be able to claim a charitable contribution deduction against your U.S.-source income. OLPC Foundation estimates that the fair market value of an XO laptop is $199.
So far, so good. But look carefully at the promotion and you'll see that your $399 is not only getting you two XO laptops. To sweeten the deal, T-Mobile is also throwing in a year's free Wi-Fi Hotspot access. And what a good deal that is:
T-Mobile HotSpot broadband Internet service is available at more than 8,500 locations throughout the United States. Your complimentary year of service is valued at more than $350!
In other words, more than $150 over the value of your charitable contribution, assuming you keep one of the laptops for yourself.
My guess is the OLPC folk would argue that your purchase only covers the laptops and that T-Mobile is providing the Wi-Fi itself at no cost to OLPC. However, you could you a similar argument to patch around the sponsored goodies offered at any number of charitable benefits ("You're only paying for the dinner and a contribution--Tiffany's giving you a free diamond ring on its own!"). The reason stuff like that reduces or eliminates the deductible amount: the IRS applies the relevant statute so as to make the pertinent factor the consideration received by the purchaser, not the cost of the item to the charity.*
Further weakening the exclusion: the OLPC website presents the computers+hotspot as a unified transaction--it's not just something T-Mobile is offering independently off-site, say, if you bring in a receipt. Let's face it--since the price of the OLPC laptop is normally $199 anyway, the only tangible financial incentive to take advantage of the promotion is the free wireless.
In short, the IRS could make a strong argument that only the people who donate both computers can take advantage of a tax deduction for the 2-for-1 OLPC purchase, in the amount of ($399 - $359.88, the retail value of the T-Mobile subscription).
Why would anyone protest cause marketing that benefits cancer charity? Check out stuff like the "Beyond the Pink Ribbon" campaign, sponsored by Lexus, Dagoba chocolate and a bunch of eco-merchants. The not so subtle message: Got breast cancer? Well, it's your own damn fault for not buying organic skincare products.
Thanks to everyone who sent me articles from yesterday's Giving section in the NY Times. Lots of interesting material in there; here are a few highlights, with a particular focus on articles useful for my law and design classes:
The sustainability ethic: Use now without depriving the future. The spend-it-sooner movement: Draw down endowments before they metastasize. Both have their place.
Short answer: The face of philanthropy changed about a hundred and fifty years ago. We're just catching up.
Target VP: "We are completely committed to giving back, it's part of our DNA." And pretty much everybody else's too, which is one reason why it's such an effective marketing technique.
Including the chart below:
The MMI Weblog has an instructive article highlighting the long-term benefits of the accountability infrastructure that Haggard himself set in place. Proof of its effectiveness: not just the ongoing viability of his church after the scandal, but the very fact that it quickly disposed of him.
NONPROFIT LEADERSHIP SUPER-IMPORTANT BONUS ADVICE:
If you really must sneak off to score hookers and meth, try not to go on TV!
I'm back from a quick trip to D.C. My overnight home was a Kimpton hotel, which is like living in a cause-marketing cube. The eco-bathroom, eco-bed, brochures touting a holistic spa, green living and free mind/body advice on TV--after about fifteen minutes of ubiquitous in-my-face virtue I was tossing clean towels on the floor and screaming at room service to wash them, NOW, dammit, and to hell with the phosphates!
Anyway, when I logged into the free wireless (hooray!) I got the Kimpton homepage, which put the whole thing in perspective. The chain is making a determined effort to target a young professional demographic, with a particular emphasis on women. In fact, I think it's the only hotel chain I've ever stayed in whose home page had a tab particularly devoted to women's interests.
An especially smart strategy: the partnership with Dress for Success, a charity that helps women-in-need develop professional careers.
Which got me thinking. Over-the-top green hype aside, the Kimpton marketing team is quite savvy, creating a hotel experience where you feel more like a real human being than a business tool in a fungible slot. If that isn't part of what social enterprise is all about, I don't know what is. And the place definitely wasn't a frattish guy biz hotel like so many I've been plunked in, replete with steak and cigars. The yoga pics and Dress-for-Success gave it the air of a quiet, confident post-movement feminism, a place that professional women could see as an extension of themselves.
In stark contrast to stuff like this:
(Warning: stuff below the jump is potentially NSFW)
Got schooled in the dynamics of wind power last week, thanks to my daily mail. The vehicle: a letter from ConEdison Solutions, chock full of green ink and windmills. The come-on: switch your home power source to wind and save the earth.
The catch: for wind power you gotta pay an additional two-and-a-half cents per kilowatt hour.
My favorite part of the whole package, though, is the way the ConEd letter tries to persuade me to buy in. Four successive paragraphs begin with the following phrases in bold:
Let's make more!
The last phrase says it all. The gist is that paying more for wind power gives ConEd more money.
Oh, right, I forgot: to invest in building more windmills.
Into this golden age of all things eco-friendly comes a quirky new fashion line called William Good.
Nick Graham, the eccentric San Francisco designer and founder of Joe Boxer, the company that gave boxer shorts personality, has teamed up with Goodwill to produce the line, which is made entirely from items from the discard bins.
Refashioned clothing is nothing new of course. It is, after all, how Banana Republic came to be, in 1978, when San Franciscans Mel and Patricia Ziegler redesigned Army surplus clothes.
What's different here is the green goal. The Bay Area Goodwill is the first in the country to try this pilot project, with the ultimate ambition of taking the line to the mass market and, in the process, saving 75 percent of all its donated items from ending up as landfill.
"We think this will spread across the country," says Deborah Alvarez-Rodriguez, the president and CEO of Goodwill Industries of San Francisco, San Mateo and Marin. "It's no accident that the CEO of the New York Goodwill was just here and will be coming back with his production people to look very seriously at this."
Goodwill has expanded in other ways as well, including offering a link to eBay, where it sells more expensive pieces that have been donated, such as a silver and ivory cuff bracelet for about $200. To jump-start the William Good promotion, Graham and Alvarez-Rodriguez flew to Los Angeles last week with about 100 items of the new line for an informal presentation at L.A. Fashion Week. On Nov. 11, the collection will be on sale for a 24-hour period in a temporary pop-up boutique in Los Angeles.
. . .Â
Alvarez-Rodriguez says she wants to employ 75 to 100 disadvantaged or impoverished people, for whom Goodwill provides job training, to work on the new line.
"I wouldn't be interested in doing this if we couldn't really build this into a viable business. We don't know yet if we can produce 10,000 pieces four times a year ... a million pieces? We're still working that out."
- Does your venture offer value-added beyond what other groups are already providing? Â For example, is it solving an unsolved problem, offering a better solution, working in a different geographical area or helping people yet unserved?Â
- Is there an existing organization you can join and perhaps improve?
- Are there identifiable funders likely to support your effort over the long term? Â Or, if you're selling goods or services, is there truly a sufficient market to support an organization that is financially self-sustaining organization or financed through a blend of earned revenue and grants?
In a recent nonprofit law class, a student asked whether a charity could enforce a pledge the donor did not honor.
Short answer: yes, it's possible, but as with many legal issues the precise answer will depend on the circumstances. A pledge agreement could be viewed as an enforceable contract. If the charity has acted in reliance on the pledge, the likelihood a court would find the pledge enforceable increases.
To see the power of an agreement and reliance, check out the tragic story of the Mondavi family, which lost control of its eponymous wine empire after the family patriarch overextended their finances in a pledge to the University of California at Davis.
Things get a bit more complicated when a donor goes into bankruptcy. Not only might the charity have to get in line with other creditors, the creditors might be able to reclaim part of the donation from the charity--in fact, the 2005 amendments to U.S. bankruptcy law significantly increased the risk for charity to sustain substantial loss when a wealthy donor files for protection.
For example, Saturday's New York Times recounts the tragic story of a philanthropic investment manager who committed suicide when investors discovered that he was actually running a Ponzi scheme. The trustee of his estate
said he was negotiating with the Country Music Hall of Fame and the university in an effort to recoup some of Mr. McLeanâ€™s donations on the ground that they were â€œfraudulent conveyancesâ€ owed to investors. The university is stripping his name from the music school.
What should a charity do to minimize the impact of a gift gone bad? Lawyer and consultant Jack Siegel offers these useful recommendations:
Pledges should be in writing, state that they are a binding contract, and provide for payment schedules that are consistent with the needs of the project that they will fund. If the pledge is to fund construction, the pledge should be secured so that the charity knows that the funds will be available as needed. Finally, before accepting a pledge, the charity should take a hard look at the donor.
In public, Anheiser Busch is taking the charitable high road, touting its donation to animal shelters in response to the Miller Lite ad featuring a Bud dalmatian. But as Advertisting Age reveals, behind the scenes the response is somewhat less than pure:
According to attendees of a wholesalers' meeting in Dallas today, A-B execs showed their sales force Miller's ad -- with a new ending.
In Lite's version, the Dalmatian cruises off happily into the sunset in his new brand wheels; Bud's version shows the Dalmatian defecating on a case of Miller Lite. Sadly, as it was intended for internal use only, none of us will ever see the spoof spot.
In my experience, the amount of innovation that makes it out of the door of an NGO is a tenth of what it could be. And the limiting factor isn't rigerous testing of ideas against reality, but institutional conservatism. Anyone who's worked in the sector knows the score;Â anxiety-based leadership, a focus on internal politics, inter-departmental struggle and an unquestioning conflation of the charity and the cause.
Yesterday in my web design class we talked about Swedish torrent site The Pirate Bay as an example of a popular nonprofit venture. The question was raised: is what they are doing illegal?
The language in U.S. is broad enough to include torrent trackers, which point to information about where material can be found. I don't know anything about Swedish law, but it's clear that the recording industry is not going to stop trying to shut The Pirate Bay down. Here's the latest from Sweden:
The Pirate Bay team does not believe that Roswall will be successful in his attempt to take down The Pirate Bay. They keep repeating that they are just running a search engine and did not store any copyrighted material on their servers.
The bankrupting bagel is the creation of chef Frank Tujague of the Westin New York hotel at Times Square and was designed in part to help raise funds for Les Amis dâ€™Escoffier scholarship, which provides scholarships to students of the culinary arts.
The bagel is topped with white truffle cream cheese and goji berry-infused Riesling jelly with golden leaves.
Talk about serendipity. I'd planned to write a post today for my web design class on one of the most successful socially entrepreneurial podcasts out there: The Midwest Teen Sex Show (50,000 subscribers and growing!), et voila, this morning there's a feature on the show in the Wall Street Journal.
As the WSJ notes, frank advice making with teh funny has proven to be a sure-fire recipe for getting a huge online audience:
Episode No. 4 of "The Midwest Teen Sex Show," a new video podcast, opens with a shot of a young woman holding a crying baby. Nearby, two young boys are noisily scuffling and trading noogies. Looking into the camera, the obviously stressed-out mother of three says nothing, but her expression says: How did I get into this mess?
Seconds later, the episode's title, "Birth Control," flashes on the screen.
That sort of wry, pointed presentation has helped the show lure thousands of viewers since its debut this past summer. Some may have been attracted by the provocative title, but this isn't pornography. Instead, it aims to teach teenagers about sex using risquÃ© sketches, explicit language and anecdotes that draw on the teenage experiences of its two 28-year-old creators -- host Nikol Hasler, the aforementioned woman, and Guy Clark, an aspiring filmmaker.
The two felt that existing sexual-education efforts were far too prim -- and boring -- to be useful to teens. Their podcast focuses less on birds-and-bees basics and more on real-life scenarios teens are likely to face.
Unless you're offended by uncensored discussions of human bodily functions, be sure to check out the site. For those of you looking to build a career that blends personal success and public service, note how the producers leverage their educational mission to promote their own talents in filmmaking and comedy. They've also adopted a tres 2.0 strategy, not merely making videos themselves but encouraging others to follow their lead, most notably in this contest for dogooder.tv.
Radar has the scoop on Perverted Justice, a nonprofit that works with NBC to bust online predators by pretending to be horny and willing underaged kids. PJ has just received its determination letter from the IRS recognizing it as a tax-exempt entity under 501(c)(3). The CEO makes $120,000 a year (as do the organization's secretary and chief financial officer), while PJ itself has received upwards of $2 million for helping Dateline NBC with its controversial sting operations.
Hey, it's a living.
NONPROFIT TRANSPARENCY BONUS: Exemplifying the spirit of openness and financial transparency that is doing so much to breed trust in charities, Perverted Justice responded to the reporter's inquiry email as follows:
"Thanks for contacting us for comment, John. Unfortunately, you're not a legitimate reporter, you're just a rather scummy fellow who writes for a tabloid rag. Other than being told that you're a scummy hack who resembles a stalker more than a journalist, we don't have any comment for you on this issue or any other issue as you've already been told in the past. We wish you the best with your low-rent reporting gig."
Hey, just substitute "agent" for "reporter" and "IRS" for "tabloid rag," and they'll have a ready-made report for their 990!
Submerged in class prep today.
Pictured above: railway museum "stock certificate" (i.e., donation receipt)
And in this afternoon's web design class: more on usability & design (including this essential article by Jason Hudnall), an overview of tech resources + an introduction to shopping carts--hopefully without another fire alarm.
Above: "Fire drill!"
Above: the banner for Tokyo design firm Power-Graffixx, aptly summarizing why most organizations who can afford it hire a designer instead of doing it themselves.
Oh! And before I forget, I was asked to write in as part of the â€œGreen is Universalâ€ initiative to save the environment. The best advice I have is to buy plants. Also, make sure your cars have good smog standards, ALWAYS separate your trash, recycle. And just plain be conscious of the environment around you. Also, and this is important â€“ donâ€™t litter!
Stay tuned, thereâ€™s more to come this season!
Oh, I can't wait.
Valerie Schaeublin, 28, a program officer specializing in international affairs for a Washington nonprofit, was fortunate to begin her career at one organization and stay for five years. Now, she is restless and fears that her NGO has limited upward mobility. But she also worries whether her ambition has atrophied.
"It's a stagnant time. It's confused by the fact that I am happy, but I know I need to move on to something else," said Schaeublin, who coordinates State Department-sponsored trips by foreign leaders to the United States. "Maybe you forgo the next step because you're comfortable. But responsibilities are weighing in on you. You're not 22 anymore."
Alright, this is friggin' brilliant. Miller challenged Budweiser with a commercial showing its dog-in-a-Clydesdale-wagon jumping ship to a Miller Lite truck. Budweiser's response: a donation to animal shelters, publicized by a response ad. The link has the original commercial and the full backstory:
The text: "Apparently, Miller Beer believes they have to say negative things about our brands to sell their beer. At Budweiser, we're positive there's a better way of doing things. In fact, we're committed to creating something positive out of their recent negative advertising.
"Their latest attack? Our wagon-riding dalmation. Our response? A donation to a number of animal rescue groups across America.
"For over 130 years, Budweiser has believed in doing things right. We're not going to stop now."
The foot of the page features a cuddly puppy, the Budweiser logo and a tagline: "Doing things the right way."
10% goes to Chrysalis, "a nonprofit organization dedicated to helping economically disadvantaged and homeless individuals become self-sufficient through employment opportunities."
Note the strategy--promote the sale as a charity auction while keeping 90% of the proceeds for yourself. The listing makes this explicit when it reserves the right to cancel auctions early "to protect C Love's investment."
Churches don't have to file 1023s (applications for recognition of tax-exemption) or 990s (annual information returns). Some do anyway, in order to promote trust among regulators, potential donors and the general public.
And here's a breaking news story illustrating why that's not a bad idea.
Lesson: the larger you are, the more you're a target.
A large charity, particularly one that has a lot of money, engages in commerce or has notable fundraising activity, must redirect attention away from finance. If it does not, it risks not only negative stories from the mass media and watchdog groups, but regulatory activity that could affect countless other organizations--particularly small groups for whom the cost of navigating the legal maze is becoming prohibitive.
Whether or not you buy the conservationist moral of this video, it offers a trenchant critique of facile environmentalism. The sustainability movement claims to leverage the dynamics of complex systems, but it has a stunning disregard for the complexity of its own preferred behaviors.
Forget al-Qaeda. Who cares about Hamas?
Clowns are going to take over the world.
"CIRCA aims to make clowning dangerous again, to bring it back to the street, restore its disobedience and give it back the social function it once had: its ability to disrupt, critique and heal society. Since the beginning of time tricksters (the mythological origin or all clowns) have embraced life's paradoxes, creating coherence through confusion - adding disorder to the world in order to expose its lies and speak the truth."
Options author Dan Lyons was Friday's guest author at Stacey's Bookstore in San Francisco's financial district. Several audience members -- seemingly unaware that Lyons had written a parody about Steve Jobs -- grilled the Forbes editor turned humorist on Apple's lack of corporate philanthropy and the allegedly widening income gap between Jobs and everyone else. When Lyons sputtered that he really didn't know the answers, one attendee snorted, "Aren't you supposed to be a business reporter?" I followed one of Lyons's attackers out of the store to a local Peet's, where she once again spoke truth to power. "It's frightening what they put in the food these days," she informed the barista. "Is this Fair Trade coffee?"
From Make: "With this t-shirt, a project by German media artist Aram Bartholl, you can proclaim your social networking cache by checking off all of the web 2.0 allegiances you are a member of. Then just wear the shirt, walk around your hometown and mingle with the electronic elite."
Which brings to mind a broader point re social entrepreneurship: Is it about doing good or proclaiming our own goodness to the world? To the extent that it's the latter, the movement's destined just to be a fad.
Charities need to exercise extra care when dealing with a foreign partner or a domestic organization with an international reach, lest they be found to be supporting terrorism. Not a good thing, that--you could find your assets frozen in an instant.
But how do you determine who's a terrorist? And how can you do this without unduly punishing innocent groups?
Given how important these questions are and the more than five years we've had to sift everything out since 9/11, the answer's easy, no?
In fact, it's getting harder every year.
On the one hand, it appears that the federal government has been overreaching in classifying groups as supporters of terrorism. The LA Times, for example, has a detailed article today on the government's stunning failure in its attempt to prosecute the Holy Land Foundation. Yet government investigators have also criticized the IRS for not making its own watch list expansive enough.
It's all rather confusing, but here's a link to current recommended best practices for screening out possible terrorist groups.
Me, I'm just gonna put my charity money in a box, stick it under my bed and watch Heroes until this whole mess blows over.
Yahoo KickStart helps recent college graduates find jobs using social-networking features. Linking recent (or soon-to-be) graduates via alumni and fraternity and sorority organizations, Kickstart is trying to help college students overcome their lack of â€œprofessional networks.â€ And in order to kick-start the effort, Yahoo is offering $25,000 to a U.S. university with the largest number of alumni profiles by Dec. 31.
Speaking of fundraising calendars inspired by the Calendar Girls, if you've been to Italy in the past few years you might recall seeing a calendar sporting pictures of . . . um . . . how to put this . . .
hot Italian priests.
BBCAmerica's broadcast of Calendar Girls, the dramatized account of how a group of ordinary middle-aged English women decided to raise money for leukemia by posing for a (semi-)nude calendar.
Not only did their work inspire countless imitators, it continues to thrive today. In fact, the CGs have diversified beyond calendars and are targeting to raise upwards of 3 million dollars in donated profits.
Breaking the law to foster respect for the law, this sly bit of graffiti captures how an act such as theft takes more away from us than property. W.B. Yeats captured a similar sentiment--the dichotomy between the real and ideal--in his poem, The Stolen Child:
Come away, O human child!
To the waters and the wild
With a faery, hand in hand,
For the world's more full of weeping than you can understand.
WEIRD LAW EXTRA:
In 2005, a Scottish developer lost about 25 thousand dollars when locals succeeded in stopping construction because the project would kill a colony of fairies.
Check out the developer's site for pictures of the rock under which the fairies are believed to live. The developer now advises building planners to factor in community mythology.
An update on the case of the French NGO workers in Chad arrested on kidnapping charges for the efforts to relocate refugee children from Darfur:
Seven of the seventeen arrested have been released.
But they're not getting much help from the UN. UNICEF has stated that it considers the would-be rescuers' actions "not consistent with international norms or practices or laws."
Last month, the people of Big Valley Church noticed their pastor dressing nicer, giving more passionate altar calls and making more frequent appeals for volunteers.
Â Â Â What they didnâ€™t know was that the church board had quietly begun using PayPerform, a program that determines how well a pastor is performing in ministry, how much he should be paid, and at what point he should be fired.
Â Â Â "Carrying out the Great Commission is a quantifiable activity," says PayPerform creator Kevin Dolan. "Public companies donâ€™t tolerate sub-par performance. They oust bad CEOs and reward good ones. Why should churches be any different? Our mission is vastly more important."
Â Â Â Programs like the PayPerform Accountability System use in-depth demographic studies to set targets for a specific churchâ€™s attendance, conversions and "capture and retention" rates of visitors. It even determines what the average tithe level should be, based on local giving rates.
Â Â Â "We love it," says one church board member. "It gives us something to stand on instead of the soft and mushy goals we used to make up every year out of thin air."
Yale Vice President for Development Inge Reichenbach said the dispute provides an important lesson for all universities accepting restricted gifts.
â€œThe Princeton situation highlights the need for all institutions accepting gifts from donors to carefully determine the expectations of the donor and the institutionâ€™s ability to fulfill them, not just in the short term, but also longer term,â€ she said in an e-mail.
It is important for universities to inform the donor how his donation is spent, Reichenbach said. Such a step, she said, can help prevent misunderstandings from growing into significant disputes.
When accepting a restricted gift, Yale always considers whether or not it can sustain the giftâ€™s original purpose over time, Reichenbach said. While creating an agreement for a restricted gift, she said Yaleâ€™s donors are asked how they would like their funds to be used if the needs for the money evolve over time.
Yale has taken special precautions to prevent disagreements with donors, Reichenbach said. After a dispute during the 1990s with billionaire donor Lee Bass â€™79, University President Richard Levin established the â€œGift Stewardship Committee,â€ which regularly compares the stipulations of a restricted gift with the way it is actually being used.
This social enterprise ad has an interesting history. The product being promoted: the Firefox web browser, a project of the Mozilla Foundation.
The Firefox community marketing network has been circulating this image around the web for a couple years, but it was originally designed as a poster aimed at college students. The poster was cancelled, however, in part due to concerns that some potential users would be offended.