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The churning sector: no storms, at least from a weather perspective.



If March goes in like a lion and out like a lamb, 2007 might well be remembered for all the commotion toward the middle of the year. The latest nonprofit scandal (The Smithsonian) hit the fan in the spring while the summer went out with a howl as animal welfare groups teamed up with their supporters to bring the pressure down on NFL NFL
abbr.
National Football League

NFL (US) n abbr (= National Football League) → Fußball-Nationalliga
 quarterback Michael Vick This article is about a person involved in a .
Information may change rapidly as the event progresses.

Michael Dwayne Vick (born June 26, 1980) is a National Football League (NFL) quarterback under suspension from play from his Atlanta Falcons team contract and
 because of dogfighting charges.

After a much-ballyhooed Democratic takeover of Congress in January, most of the changes affecting the nonprofit sector came from other federal agencies, like the draft Form 990 revision released in the summer by the Internal Revenue Service ORS ORS oral rehydration salts.
Oral Rehydration Solution (ORS)
A liquid preparation developed by the World Health Organization that can decrease fluid loss in persons with diarrhea.
).

The nonprofit sector continued to grow in 2007 yet software companies serving nonprofits went in the other direction after millions of dollars worth of mergers and acquisitions in the marketplace.

The year burst out of the gates with major moves in January by software companies, which returned by the summer with even more news. Charleston, S.C.-based Blackbaud acquired Target Software and Target Analysis Group in Cambridge, Mass., for $60 million while Convio bought GetActive for almost $18 million. By August, Blackbaud had acquired another company, Indiana-based eTapestry, for nearly $25 million.

Convio also decided to join the ranks of public companies, like Blackbaud and Kintera, filing for an Initial Public Offering (IPO (Initial Public Offering) The first time a company offers shares of stock to the public. While not a computer term per se, many founders, employees and insiders of computer companies have found this acronym more exciting than any tech term they ever heard. ) in August. Convio, which gained attention for Howard Dean's 2004 presidential campaign, is still in the quiet period while its IPO is under review by the Securities Exchanges Commission. The IPO is expected early in 2008. The Austin, Texas-based firm was founded in 1999, raising more than $37 million in four rounds of venture capital funding, and plans to generate $86 million through the IPO.

Kintera wasn't as busy buying up companies as in previous years but it was still busy, only with internal changes. After hearing calls for his resignation from investment firms holding almost a third of outstanding shares, co-founder Harry Gruber stepped down in March, replaced by Richard LaBarbera, while still remaining on the board.

In addition to laying off 16 percent of its workforce, the San Diego-based company announced it would cut expenses and discontinue some products to save about $10 million a year.

'THIS YEAR'S ... (FILL IN THE BLANK)'

As one observer put it, The Smithsonian was this year's The Nature Conservancy Nature Conservancy, nonprofit organization established in 1951 to preserve or aid in the preservation of natural environments. It protects wilderness areas in the United States and Canada and is affiliated with similar groups in Latin America and the Caribbean. , American Red Cross American Red Cross: see Red Cross.  or United Way; in other words Adv. 1. in other words - otherwise stated; "in other words, we are broke"
put differently
, the latest, biggest nonprofit scandal.

Lawrence M. Small Lawrence M. Small was the President and Chief Operating Officer of the Federal National Mortgage Association and the 11th Secretary of the Smithsonian Institution. Background
Small graduated from Brown University 1963 with a Bachelor's Degree in Spanish literature.
 resigned in March as general secretary at the Smithsonian in Washington, D.C., following an inspector general's report of millions of dollars in housing and office expenditures and unauthorized expenses. The "lavish or extravagant" transactions were detailed in numerous published reports and ultimately resulted in what amounts to a potential kiss of death kiss of death

gangsters’ farewell ritual before murdering victim. [Am. Cult.: Misc.]

See : Farewell
: increased scrutiny from Sen. Charles Grassley (R-Iowa), the ranking Republican and former chairman of the Senate Finance Committee. Describing Small's "Dom Perignon Dom Perignon

renowned vintage French champagne. [Western Cult.: Misc.]

See : Luxury
 lifestyle," Grassley pushed through the Senate a freeze on the Lawrence Small Smithsonian's $17-million budget increase for 2008, before Small stepped down.

[ILLUSTRATION OMITTED]

The 65-year-old former banker was replaced as secretary by Christian Sanger, head of the National Museum of Natural History For the museum in Manhattan, see .

This article is about the museum in Washington, D.C.. For other uses, see National Museum of Natural History (disambiguation).

The National Museum of Natural History
, until a permanent replacement is found.

The museum's Board of Regents An independent governing body that oversees a state's public Colleges and Universities.

All 50 states have governing bodies that oversee the administration of public education.
, which during the course of Small's seven-year tenure tripled his salary, appointed two committees to examine management operations of its more than two dozen museums and research facilities. In June, the governance committee made recommendations and submitted a 107-page report to the board detailing governance and ethics lapses during Small's tenure.

"It isn't just that the Smithsonian's governance nightmare is overseen by appointees from the three branches of the federal government, including the chief judge of the U.S. Supreme Court, but that they were joined in spurning the basics of accountability by foundation members of the Board of Regents," said Rick Cohen cohen
 or kohen

(Hebrew: “priest”) Jewish priest descended from Zadok (a descendant of Aaron), priest at the First Temple of Jerusalem. The biblical priesthood was hereditary and male.
, former executive director of the National Committee for Responsive Philanthropy (NCRP (Network Computer Reference Profile) The specification for network computer compliance established by Oracle and endorsed by Sun, IBM and others. The first version of this specification was known as the NC1 Reference Profile. See network computer. ) in Washington, D.C. "Despite grandiose promises to change and improve, and despite high-profile assistance from the nation's top nonprofit leaders, every indication is that the Smithsonian's top leadership--staff and board--still don't seem to grasp the principles of nonprofit and public accountability, or perhaps they think that they're somehow above it all," he added.

"Public accountability and lack of accountability themes has been really troublesome for the nonprofit sector," said Pablo Eisenberg Pablo Eisenberg is a leading scholar and advocate for greater accountability and commitment by philanthropy in the United States to the poor, people of color and social justice issues. , senior fellow at the Georgetown Public Policy Institute's Center for Public and Nonprofit Leadership. "It's been troublesome because an increasing number of, at least the larger nonprofits, as they are examined by investigative reporters, have really come up short."

[ILLUSTRATION OMITTED]

He called the Smithsonian episode "an extraordinary tale of a total lack of oversight and fiduciary responsibility by the board of regents.

"It's a question of a terrible governance structure," he said, impeded by the fact that there are eight government representatives, with no time for oversight, and nine lay members who were, until recently, five "corporate types. It's just a terrible situation."

ACCOUNTABILITY AND GOVERNANCE

Two things from 2007 that might help address the issue of charity governance and oversight are the revised IRS An abbreviation for the Internal Revenue Service, a federal agency charged with the responsibility of administering and enforcing internal revenue laws.  Form 990 that was unveiled this past summer, and the Panel on the Nonprofit Sector's 33 "Principles for Good Governance The terms governance and good governance are increasingly being used in development literature. Governance describes the process of decision-making and the process by which decisions are implemented (or not implemented).  and Ethical Practice: A Guide for Charities and Foundations."

A draft of the long-awaited revision to Form 990 was the first overhaul of the federal nonprofit tax form in almost three decades and sparked a deluge of public comments into the IRS all summer. The form takes on matters of governance and policies more than previous documents.

No action is likely until 2008 on the new IRS Form 990 revision, said Gary Bass Gary D. Bass is the founder and Executive Director of OMB Watch.

Dr. Bass received a combined doctorate in psychology and education from The University of Michigan. He was President of the Human Services Information Center before founding OMB Watch in 1983.
, executive director of Washington, D.C.-based OMB Watch OMB Watch is a 501(c)(3) nonprofit organization based in Washington, DC. OMB Watch was formed by Gary Bass in 1983 to lift the veil of secrecy shrouding the White House Office of Management and Budget (OMB). , but the draft that was made public in June "certainly created a bit of a start." The Form 990 likely will be designed by the end of 2007 and published in 2008 for the 2009 filing season.

Based on those early comments this summer, the IRS already has decided to do away with some items in the draft, such as expense ratios on the summary Page 1. But nonprofits might have to report revenue and expense totals for two years. A new Schedule O will allow nonprofits to include information to present a fuller picture of activities.

The Panel's new principles were re leased in October to mixed reviews. Praised for their thoroughness and completeness, the principles won't necessarily apply to all organizations and are voluntary, something critics targeted.

"I've never seen any cases of serious self-reform," said Eisenberg. Some believe there's only a few bad apples in the barrel, but he maintains, "there are a lot of bad apples; the barrel is not getting any smaller and the apples are not getting fewer in number."

EXECUTIVE MOVES

Whether or not it signaled the forthcoming exodus of retiring nonprofit executives, some big names stepped down during 2007, or at least announced their intentions.

[ILLUSTRATIONS OMITTED]

Robert Goodwin's retirement after 15 years as CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board.  of the Points of Light Foundation (PoLF) in Washington, D.C. paved the way for a merger with Atlanta-based Hands On Network The Hands on Network is a non-profit volunteer organization focusing on community service that is based in Atlanta, Georgia. About
According to their website, Hands On Network coordinates a number of "Hands On cites" across the United States.
 (HON). The groups officially merged Aug. 1.

Although they started from opposite ends--one entrepreneurial and organic, the other out of a presidential vision--the merger between PoLF and HON has been thus far one of synergy.

"What we found is, that when you overlaid our two visions and missions, there was actually not very significant difference," said Michelle Nunn, co-founder of HON.

"We did have different approaches to how we accomplished those things," added Nunn. "But that made it easier because, in fact, what we have are some complementary assets." According to according to
prep.
1. As stated or indicated by; on the authority of: according to historians.

2. In keeping with: according to instructions.

3.
 Nunn, with the increased efficiency the 2008 budget for the merged organization will be approximately $34 million. The two organizations had combined budgets of about $40 million.

Nunn, daughter of former U.S. Sen. Sam Nunn Samuel Augustus Nunn, Jr. (born September 8, 1938) is an American businessman and politician. Currently the co-chairman and Chief Executive Officer of the NTI (Nuclear Threat Initiative), a charitable organization working to reduce the global threats from nuclear, biological and , will head the new entity, which currently uses the moniker (1) A name, title or alias. See alias.

(2) A COM object that is used to create instances of other objects. Monikers save programmers time when coding various types of COM-based functions such as linking one document to another (OLE). See COM and OLE.
 "The Points of Light and Hands On Network."

After more than a year of discussions, the merger was announced at the 2007 National Conference on Volunteering and Service in Philadelphia this past July.

According to Nunn, the group is currently grappling with issues of combining staffs, ensuring that the federal investments PoLF has traditionally received continue, and raising private sector dollars. The location of its headquarters is yet to be determined, said Nunn, however there will be a presence both in Atlanta and in the nation's capital.

"Both organizations are trying to now use the merger as an opportunity to define the future of how volunteering will happen versus just looking back on what we were doing," said Nunn. "We want to make sure that we are on a continued upward climb around volunteering and civic engagement."

Other retirements this year read like a sample who's who Who’s Who

biographical dictionary of notable living people. [Am. Hist.: Hart, 922]

See : Fame
 of the nonprofit sector. After 36 years with the New York New York, state, United States
New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of
 City-based Ford Foundation, including 12 as president and CEO, Susan Berresford announced on Sept. 28 she will retire, effective January 2008.

Edward Skloot retired as executive director of the Surdna Foundation The SURDNA Foundation was established as a charitable foundation in 1917 by John Emory Andrus to pursue a range of philanthropic purposes. History
A devoted family man with eight children, Andrus founded the Julia Dyckman Andrus Memorial in 1923 as a tribute to his
, a family foundation headquartered in New York City New York City: see New York, city.
New York City

City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S.
. The foundation's first professional employee, Skloot built a staff of 20 and helped Surdna grow assets of nearly $700 million and earn a national reputation for entrepreneurial grantmaking. Skloot is also a member of the Panel on the Nonprofit Sector, convened by Independent Sector.

Betsy Johnson announced plans to end her nearly 22-year tenure with the Center for Nonprofit Advancement next summer. Johnson helped the group grow from roughly 200 members to more than 800. Also this year, Steve McCormick stepped down from The Nature Conservancy, in Arlington, Va.

[ILLUSTRATIONS OMITTED]

The American Red Cross (ARC) finally hired a new CEO, Mark Everson, who moved over to the ARC from running the IRS. His appointment ended an interim tenure of 15 months by Jack McGuire, executive vice president for blood services operations, who served after Marsha Evans resigned in December 2005.

SICK OVER VICK

Dogfighting charges involving Atlanta Falcons quarterback Michael Vick dominated the news this past summer, putting nonprofits like People for the Ethical Treatment of Animals People for the Ethical Treatment of Animals (PETA) is an international nonprofit organization that supports Animal Rights and has spawned a tremendous amount of conflict and controversy from its inception.  (PETA Quadrillion (10 to the 15th power). See space/time. ), Humane Society of the United States The Humane Society of the United States (HSUS) is a Washington, D.C-based animal welfare advocacy group. It is the largest animal welfare organization in the world, with nearly 10 million members and a 2006 budget of US$103 million.  (HSUS HSUS Humane Society of the United States ) and American Society for the Prevention of Cruelty to Animals American Society for the Prevention of Cruelty to Animals (A.S.P.C.A.), chartered in 1866 in New York by Henry Bergh to shelter homeless animals, to assist farmers in caring for their livestock, and to cooperate with law enforcement agencies in the prosecution of  (ASPCA ASPCA
abbr.
American Society for the Prevention of Cruelty to Animals

ASPCA n abbr (= American Society for the Prevention of Cruelty to Animals) → SPA f

) in the headlines.

[ILLUSTRATION OMITTED]

The charges garnered some attention in the spring, but when the federal indictment came down in July, Vick was branded Public Enemy No. 1. Upon release of the federal indictment, which indicated Vick was involved with torturing dogs on his Virginia property, animal welfare groups sprang into action, marshalling their forces for an all-out attack. Animal-related nonprofits called on supporters to contact the National Football League (NFL), Atlanta Falcons and almost anyone who would listen.

The online campaign by the HSUS generated 275,000 emails to the NFL commissioner's office through its site, enough of a flurry to bring down the donation and action pages of me nonprofit's Web site for a few hours. More than 50,000 supporters had contacted the NFL through PETA.

Not only did the Vick indictment, and eventual guilty plea, drive traffic to these groups' Web sites, but it also drove donations and fundraising of all kinds. HSUS estimated that it added more than 200,000 people to its email lists--a 20-percent boost--in addition to selling thousands of Vick-related shirts. Even regular citizens got into the act, auctioning off Vick trading cards that were chewed or defecated on by their pets, and donating proceeds to local animal shelters. HSUS itself auctioned off the notes that Vick allegedly used during his public apology in August, generating wide media interest as well as a $10,200 winning bid.

GIVE IN THE USA

Americans continued to give to charity in record numbers, approaching the $300-billion plateau. Giving USA 2007 estimated that $295 billion was donated to charity in 2006, a new one-year record, despite the lack of a major disaster on the order of Hurricane Katrina or the Asian tsunami. The figure represents a 4.2-percent increase (1 percent adjusted for inflation) compared to the previous year's giving, almost $12 billion.

As always, Americans continued to show their benevolence BENEVOLENCE, duty. The doing a kind action to another, from mere good will, without any legal obligation. It is a moral duty only, and it cannot be enforced by law. A good wan is benevolent to the poor, but no law can compel him to be so.

BENEVOLENCE, English law.
 in times of crisis or disaster during 2007, responding with almost $30 million in donations for victims of the Southern California wildfires that torched thousands of acres in October.

The NPT NPT National Pipe Taper (pipe thread specification)
NPT Non-Proliferation Treaty
NPT Nonprofit Times
NPT Newport (Rhode Island)
NPT Nuclear Nonproliferation Treaty
NPT Neath Port Talbot
 100, The NonProfit Times' annual study of the nation's largest nonprofits, also indicated charities generated more contributions. The top 100 nonprofits in the study had total revenue of $64.24 billion, up almost 9 percent compared to the previous year's total of $59 billion. Most disaster relief groups saw their revenue return to normal a year after responding to Hurricane Katrina, while capital campaigns boosted revenue for other nonprofits, from hospitals to museums and arts centers. Charities also benefited from another strong year for the stock market, watching as investment income rose from $3.27 billion to $4.7 billion this year.

All that added revenue will be needed as nonprofits, and the rest of the country, have to pay more for postage after new rates went into effect in the spring and summer.

[ILLUSTRATION OMITTED]

While rate hikes varied depending on their category and how pieces are mailed, the average nonprofits postal rate rose almost 7 percent. The new rates likely struck a blow to front-end premiums, such as greeting cards, which would be pushed into a new category, Non-Flat Machinable, that could double the rates.

DISPUTES AND LAWSUITS

No year in the nonprofit world would be complete without some lawsuits and general disagreements.

Eight charities were involved in a brouhaha over a

$264-million bequest before finally reaching a settlement. Six charities did not dispute the will, but The Salvation Army and Greenpeace went to mediation over a question of Greenpeace's eligibility to the bequest of Guy DiStefano, an Issaquah, Wash., man who died in July 2006. Other charities that received some $33 million in the bequest were American Humane Association, Disabled American Veterans The Disabled American Veterans, or DAV, is an organization for disabled veterans that helps them and their families through various means. It currently has over 1.2 million members.

The DAV was controversial during the 2006 election cycle.
 Charitable Service Trust, Santa Barbara Hospice Foundation, Visiting Nurse vis·it·ing nurse
n.
A registered nurse employed by a public health agency or hospital to promote community health and especially to visit and administer treatment to sick people in their homes.
 & Hospice Care of Santa Barbara Foundation and World Wildlife Fund.

Greenpeace settled on $27 million after the dispute, which revolved around whether it should get the funds since DiStefano's will indicated an organization called Greenpeace International, which had folded into Greenpeace several years earlier.

A fight continues between Johnson & Johnson and the Red Cross over the red cross emblem and whether it's a trademark of the New Brunswick, N.J.-based pharmaceutical giant. A judge recently dismissed one of the eight claims against the Red Cross.

[ILLUSTRATION OMITTED]

ALL QUIET ON THE CONGRESSIONAL FRONT

On the regulation side of things, it was a quiet year from Congress. Following the mid-term elections of 2006, the first year that Democrats were in control didn't quite live up to the hype as far as it concerns the nonprofit sector. "All this lead-up last year over charitable tax incentives, charitable accountability, it seems to be pretty quiet on that front" said Gary Bass, executive director of Washington, D.C.-based OMB Watch. "Maybe it's the absence of activity that's news." Congress has been appropriately putting its energies into other higher priorities, such as lobby reform, the war in Iraq and corruption. "I think it makes sense that they're not aiming at philanthropy and nonprofits when there are other huge items out there," he said.

[ILLUSTRATION OMITTED]

Cohen cited the reintroduction by Congressman Xavier Becerra (D-Calif.) of "the notion that the primary beneficiaries of tax-exempt resources should be the nation's poor, disadvantaged and disenfranchised," what he called "an old but desperately needed concept into the national dialogue" on nonprofits.

"For too long our nation has had any 'anything goes' mentality about nonorofits, that the variety of charitable activities that can be justified under federal law are equally valuable and equally valued. Let's hope that Becerra's conceptual breakthrough is maintained and evolves from an interesting discussion point to substantive public policy debate and action," he said.

Bass pointed to the lobbying and ethics reform bill that was approved in September as one of the bigger items that came through Congress in '07. More impact on the nonprofit sector was felt from other areas of the federal government, he said, such as the IRS and Treasury Department. The IRS issued a revenue ruling on political activity that described the types of activities in which nonprofits can engage, though Bass said it also left nonprofits confused since there's no test on political activity, as there is on expenditures with lobbying rules.

The U.S. Supreme Court's decision in WRTL WRTL Wisconsin Right to Life  v. FEC See forward error correction.

FEC - Forward Error Correction
 fell on the side of protecting free speech and advocacy, leaving it up to the Federal Election Commission (FEC) to create regulations that support the ruling, Bass said. The extent to which nonprofits can be involved in a vibrant democracy, he said, is still left unclear.
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Title Annotation:YEAR IN REVIEW
Author:Hrywna, Mark; Nobles, Marla E.
Publication:The Non-profit Times
Date:Dec 1, 2007
Words:2805
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