Episode 109: One Man's Trash is Another Nonprofit's Burden: How to Prevent Donations from Derailing Your Organization's Goals
Be careful when accepting donations. Because they are tax deductible, individuals/companies are incentivized to donate. However, often these donations may not align with your organization's goals, may be obsolete and unusable, and end up costing the organization either in space, time trying to figure out how to use it, or money--getting rid of it. Learn how to make donations work for your organization by establishing donation criteria that helps guide the process so that it helps, not derails your organization from accomplishing its goals.
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🔦 NONPROFIT SPOTLIGHT 🙌🏿
Compton Girls Club Pt. 1
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🚀 RESOURCES TO HELP YOU RUN A SUCCESSFUL NONPROFIT
How to Build a Grant-Responsive Volunteer Program https://drive.google.com/file/d/167QWgqONlOIcqizbUD5OeGZ6mgGZrq60/view?usp=drive_link
90 Days to a Profitable Nonprofit https://drive.google.com/file/d/1ofgeHJ2CTVS0t8STMiNqfveaVpWfaK7o/view?usp=sharing
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Podcast Transcript
Speaker 1 (00:01):
Welcome to On Air with Amber Wynn, where nonprofit leaders learn to fuse passion and commitment with proven business strategies to create long-term funding impact and sustainability. And now here's your host and resident, Philanthrepreneur Amber Wynn.
Speaker 2 (00:22):
Good morning fam. Amber Wynn in the house. Today we are going to talk about something that I think is really important as a 501(c)(3) tax exempt donation. One of the lures of having this status is that your donors get a tax write off, and so that was by design the government put in place that benefit, so to encourage more people to donate to your organization. And so today we're going to talk about how one man's trash is another nonprofit's burden. And I use the word burden because if you don't have a strategy in place to manage the types of donations that you get, it's really easy to have your organization's goals derailed. So today's topic is one Man's Trash is Another Nonprofit's burden, how to prevent donations from derailing Your Organization's goal. So when we get back, we're going to dive right in.
(01:27):
If you're just starting out and have limited resources, you may be tempted to use a volunteer base model for your nonprofit funders prefer paid staff because there's more accountability and consistency. But if you want your proposal to be competitive, then having more than just volunteers who come and go is essential. Check out my building and effective nonprofit volunteer program toolkit. It provides all the essential elements of an effective nonprofit volunteer program. Things that demonstrate standardization, consistency and continuity. Learn how to develop a nonprofit volunteer program funders feel comfortable with funding. Order your copy today. Welcome back to On Air with Amber Wynn is your girl in the house, Philanthrepreneur. Today we're talking about donations specifically how to prevent those donations that people so generously give from derailing your organization's goals. Listen, it's important to understand that the 501(c)(3) tax exempt status is a benefit. It's a benefit for your organization, but it has to be used in a way that is in alignment with your goals.
(02:39):
What do I mean? I mean, when I was executive director, I had people most, most of them really well intentioned, would call the organization and say, Hey, I've got these computers we don't use anymore. We'd like to donate them. And yes, they would get a tax write off for that. Fast forward, you get these computers, they got floppy discs, right? It's like they're old, they're obsolete. You can't do anything with them. So now you have two choices. If it's got floppy discs, there's just nothing you can do with that. But let's just say they're old. We're seven, 10 years old. So you can't update them, you can't put more software, you can't do anything with them. What typically happens is a nonprofit tries to get somebody to make them so where they're functional so that their participants can use them. Adults, children, because their goal is to maybe have a computer center, but if you've been donated equipment that's obsolete you can't work with, then it doesn't help you.
(03:54):
And so what happens is when we talk about your goals being derailed, now you've got this junk. I'm just going to keep it real that you can do nothing with. So it's important when we talk about donations that you control what is donated. I was at a conference last week and I was talking to the executive director of a nonprofit where we used to donate all the time. It's for unwed pregnant teens. And I was saying, wow, that used to be a project of ours where we would gather things and then during the pandemic, of course, a lot of stuff shut down. But what they started to collect also was scrutinized so gently used has a criteria meaning don't be bringing me no stain stuff. Don't be bringing strollers that looked like they came from 1982. What happens is people will go through their stuff, their garage, their closet, and their thoughts are something is better than nothing.
(05:03):
Well, if you get things that have to be laundered, if you get things that have to be cleaned, that is more of a burden on your organization than it does help. So I have people say to me all the time, no, I'm not going to donate it. Because they want you to clean it first and they want you. Yes, because if you don't, then that expense then goes on to the nonprofit. If you're going to donate a computer, let it be pretty much recent within the three years because they're obsolete after 18 months. And if it's going to be furniture or clothes, then it needs to be something that's not going to be a burden on the nonprofit. So as the nonprofit, what you want to do is make clear what your donation policy is, and this is how you're able to ensure that another man's trash is not your burden.
(06:00):
You don't want trash donated. If you're doing workforce development, you want quality clothes, not just something that they've put into a bag and now they're going to get to write it off. You want it to be laundered. I've had tales of people saying, oh my God, it smell like dog. It's not going to benefit you if you're spending money to have it laundered, it's not going to benefit you if you go through it and half of it is not even usable. So what I suggest is on your website, you have your donation policy and you're very specific. If you're going to donate paper, it's going to be white paper because you'll get 15 reams of golden rod paper and maybe you can find a purpose for it if you're in arts and crafts. But if you are a workforce development, what are you going to do with goldenrod?
(06:54):
I guess you can use it as flyers. I don't know. What I'm saying is be very specific. We'd like white rings of paper, we'd like computers. Dells with Windows 10.5. We'd like clothes size 24. Be very, very specific so that when your donors come to donate, they understand what it is that you need. Donations are a part of any successful fund development strategy. Why? Because donations are cost savings, which means that what you get donated, you now don't have to take from your budget. So that's a part of a fundraising strategy. You want to save as much of your budget as possible because when you have more money in the bank, then you have more flexibility just in case something comes up. So instead of buying 10 cases of paper, you get those cases donated. That's the money you don't have to spend from your budget. So definitely, definitely want to encourage donations. You just want to make sure that you are clear about what's being donated and you're not just taking anything that comes in. I had a client, she served veterans, and she calls me and she's like, oh, we've got this donation. And I'm just like, what are you going to do with it? She's like, well, can we build a program around it? I'm like, no, no, no, no. That's not. That's the way you do it. You have your programs and the things that are donated.
(08:30):
They should support the programs you already have, unless of course there's this great opportunity. The best donors are corporations because corporations are at the forefront of advanced technology. So if a corporation says We want to donate our computers, there's a higher likelihood that they're going to be more current. And so yes, if you don't have any computers, this donates their computer, then you can create a computer center. You can create some type of program that utilizes those computers. But if it's old and it's junk and it's just more headache than it is help. So I just really wanted to point that out because we have a lot of founders who start their nonprofits and they're like, oh, we'll get that donated. We'll get that donated. Okay, you can get it donated, but be very clear about what types of things you're going to get donated.
(09:28):
And again, it's real simple. You put it on your website, you put it on your Facebook, you put it on your Instagram, and you let people know what items would help you. So you don't want people just randomly bringing you things you want them to see, oh, these are the types of items that would help to support your mission. So you always want to be control, be in control, ladies and gentlemen of the things that are coming into your organization because people will wait till it's tax time and they will go through their closet. Yes, they will. And they will collect all of this stuff because they need a tax write off. So now their trash is now your burden. And so instead of them taking it to the dump, they bring it to the nonprofit, they get the benefit of the tax write off, and now you've got to figure out what to do with it.
(10:17):
We don't have time for that. Your mission is important and you have goals in place. Just make sure that you create some type of donation criteria. Put it on your website and your social medias. If someone calls you and say, Hey, we wanted to make a donation, this is what you say, amazing. If you could go to our website to see what our donation criteria is, I really would appreciate that. End of story. And they're like, you have a criteria. You're a nonprofit. Yes, ma'am. But we have a limited amount of storage, and so we just want to make sure the things that we accept are going to be in support of our mission. See, easy response there, right?
(10:56):
We're going to pause now for a commercial, but when we come back, guess what we're going to do? We're going to ask Amber, whatever pressing question you have going out there, so we'll be back in a minute. Are you struggling to fund your programs? Can't get a grant to save your life. Most consultants will share the what of how to start a nonprofit or how to fundraise. They may even share the why, but they don't share the how because that's where they make their money. Now, I'm not hating. I'm a businesswoman too, but I've been where you are trying to make the world a better place, struggling to keep the doors open up to the wee hours of the night writing grants and doing whatever needed to be done. And because I've walked in your shoes, I'm not here to make you spin your wheel, waste your time or your hard earned money.
(11:47):
We ain't got time for that. The world needs you. I'm here to show you how to transform that pit. You keep dumping your hard earned money into a profitable nonprofit. I take my 30 years of nonprofit experience as a founder, executive director, program developer, grant writer in funder, giving out over $7 million annually in grants, and I save you literally thousands of dollars and hundreds of hours. I walk you through setting up your nonprofit organization so that you can be generating enough revenue to cover your monthly expenses in just 90 days. How would that feel? Not paying bills from your personal bank account. I share my insider secrets, tips, tricks of the trade, and provide you with a step-by-step roadmap on how to turn your bootstrap organization into a profitable nonprofit. Within six months, you could be generating enough revenue to pay your salary or fully fund your programs.
(12:46):
The choice is yours, but you have to get the blueprint, and it took me three years to develop it, but it's here and it's going to change your life. Join my other successful clients who are just like you full of passion and determination, but they had no idea all that it takes to run and fund a successful nonprofits. Now they're winning grants and drawing a salary and they know what it is that they're supposed to be doing to run a successful nonprofit. They're no longer making it up as they go. They have the roadmap and they're clear about next steps, and I want that for you too. So what do you get in this course? You'll walk away with knowledge, products, processes, and systems, not just a bunch of promises, but exactly what you need to turn your organization into a profitable nonprofit. I promise you don't need grants.
(13:40):
What you need is a solid infrastructure, and this course is going to give you all of that and more. And what's more it comes with the money back guarantee. So go ahead, click the link below to register for this course. Welcome back to On Air with Amber Wynn. Today we're talking about how one man's trash is another nonprofit's burden. Now it's time in the episode for you to get your questions answered by your girl. It's called Ask Amber. And in this week's episode, we have a question from Letitia and San Bernardino. Letitia says, my board president recently resigned. She wrote this long letter to the rest of the board saying I had founder syndrome and was choking what could be a very impactful organization because I wouldn't listen to her. This is my organization. I started it 10 years ago. It's been my blood, sweat, and personal funds that's gotten it to this point.
(14:38):
I won't just let people change the mission of why I started this organization. I've been told other board members are thinking about resigning or fire me from my nonprofit. I know I'm rambling, but I'm so upset that someone or this group would think about taking my organization from me. My question is, how do I go about firing this board and starting from scratch with people who understand that this is my vision and that they're here to support me? Well, Letitia, Hey girl. Hey, and a couple of things, and I'm going to start with the legal points of clarification. I think this is important. First of all, I want to say to you that you will always be the founder. As long as the organization is active and you're doing what you need to do, you'll always be the founder. However, what the IRS has said is that number one, this is a public charity and a public charity can never be owned.
(15:50):
If you read in your bylaws, it says, if this organization is dissolved, your assets, the assets of the company has to be distributed to other 501(c)(3) public charities. It's not going to come to you. It's going to go to another nonprofit. Why? Because it is a public charity. So regardless to what you think or believe or the 10 years that you've put into this organization, it is not your organization. You founded it, but you don't own it. If you have an LLCA corporation, yeah, you own those, but a public charity, a 501(c)(3), cannot be owned, not by one person, not by the founder, not by the board, not by a group of people. You cannot own it. The second thing legally that I want you to understand is that the IRS has set up the structure for the public charity. What does that mean?
(16:48):
That means that the governing entity, the board is responsible for hiring and firing the executive director. So if you serve as the founder in the executive director role, which most people do, because that is the only leadership role that can get paid, you can't get paid as a board member, as a president. If you serve as the executive director, even if you're the founder, it is the fiduciary responsibility of the board of directors to not only hire, but to support and to fire the executive director. That's why you hear of people saying, oh, the board fired me, the board, because legally they could, because that's the way the IRS set up the nonprofit. So I just wanted to point out those legal things, right? The next thing I want to say to you is there is such a thing called founder syndrome. And founder syndrome is when you as the founder, you're not open to new ideas, you're not open, you're just not open.
(18:00):
You say what you said here, this is my organization. If you don't like it, you can take the high road. That's not healthy for a nonprofit. You need to be open so that the organization can grow. And here's the thing, the board is not at the service of the executive director. It's the other way around. The board is responsible for hiring and firing the executive director. So you're at the service of the board. So when they say that they can fire you, they absolutely can. So I want to answer your question. You said, how do I go about firing this board and starting from scratch with people who understand that this is your vision and that they're here to support you? What I'm going to honestly recommend is that you bring in a nonprofit professional who can mediate between you and the board. Because my question is this, if this is just one person who's mouthing off, okay, it's just this one person, she's going to resign, let her be about her business.
(19:04):
But if the other people too are considering stepping away from your organization, there seems to be the common denominator you have, you taken a step back to see if what they're talking about has any merit. Here's the other thing, the IRS that's made it the fiduciary responsibility of the board to fundraise, to support you. So if you are running the organization in such a way that the board is not exercising its fiduciary responsibility, which is to guide the organization because you won't let it, then are they going to be receptive to fundraising? I'm pretty sure that the answer is no. So I'm going to encourage you, beloved, to just take a step back and to listen to what it is that your board is saying. Maybe what they're trying to do is not the way that you would do it, but my question is, will it get you to your end goal?
(20:06):
If your vision is to support seniors and you thought that you wanted to go into all of these, I don't know, senior homes and provide whatever, and they want to do a conference, does that support your mission of supporting seniors? You see what I'm saying? So one of the things I had to do when I was an executive director is to look at how many ways can you skin a cat when I'm Type A and I am have a tendency to want to do things my way, but what that gets you to type A people is exhaustion, burnout. And so if you build leaders, if you allow your leaders to lead, what that's going to do is to increase your capacity. So Letitia, just look at what it is that your board is saying, see if there's any validity to it, see if what they want to do will get you to where you want to be.
(21:02):
It's just not your way of getting there. But I definitely want to encourage you to get a mediator to have this conversation. The last thing I'm going to say to you is it sounds like you're not really up to date on what the IRS says a nonprofit is and how it's supposed to run. So I'm going to encourage you to get more information about what a nonprofit is and what it's not. You can always go to my website. I have lots of resources explaining to you what the fiduciary responsibilities are of a board and what that looks like in terms of founders and executive directors. Thank you so much for your questions. For the rest of you out there, if you have questions and you want me to answer, hit me up on any of my socials, I am excited to respond to your specific questions.
(21:53):
And yeah, that was a doozy, but we're going to keep it moving because now is the time of the episode that I get to do what I love to do, which is to shine a light on amazing nonprofit leaders, my founders and executive directors. We are starting a whole new series, the nonprofit spotlight. It's called Shine On, where I get to share with you either an amazing nonprofit or a consultant or an agency that supports our nonprofit. For this series, I'm going to share with you our first session with the executive director, Chrystani Heinrich, and she's from the Compton Girls Club. Now, y'all know I'm from Watts, and so woo woo out to Compton, but I want you to just listen to this first part where Chrystani is talking about why she started the organization and what she hopes to accomplish with this amazing organization called Compton Girls Club. Let's listen to Chrystani Heinrich of Compton Girls Club.
Speaker 3 (23:15):
I started Compton Girls Club in 2017. I was the librarian at Compton High School, and libraries weren't really, they're not doing their thing anymore, sadly, but kids were still coming up there, and a lot of times it was girls we're just kind of sad, just kind of sitting to the side. They come in, put their head down, or they come in to fight someone, or they just were in there sad. And interestingly enough, I was kind in the same position. I had hit the paper ceiling. I couldn't find other word. I was just kind of there, and I'm like, this can't be life. This isn't it. And so I was like, well, let me dig deep. What can I share? I have skills. What kind of things can I share? I was a girl scout. I was like, these girls need something like the Girl Scouts, but not quite.
(24:02):
And so I made a six week workshop where we did things that we have adults have done dozens of times. We did vision boards, we did journaling, we made collages, brown sugar, body scrubs. I was paying for it all out my pocket. And by week seven, they were like, so what are we doing this week? And I'm just like, oh, y'all liked it. Y'all came in with an attitude at first, but now y'all like it. And I was like, okay, there's something here. And I posted everything on Instagram because Instagram was the social media at that time, and just people from the community was just like, how can I help? How can I help? And yeah, we kind of grew from that.
Speaker 2 (25:10):
Welcome back. You're on air with Amber Wynn, and today our topic was about donations and how nonprofits can be sure that people's well intentions does not derail them from their goals. One man's trash is another nonprofit's burden. I'm going to encourage you to do what I said earlier in the episode to create a donation criteria posted on your website, on your social, so people are very clear about what it is you need and not just bringing you junk that you then have to figure out how to get rid of. Yeah. If you want to finish watching the full interview with Chrystani from Compton Girls Club, be sure to go take a look at my YouTube. As a matter of fact, if you like the information that I've been sharing with you today or any other of the episodes, be sure to share them with your community. Be sure to subscribe like this episode, y'all know how those algorithms go. All right, guys, thank you so much for your support. Thank you so much for being in community with me. I am your biggest cheerleader and your biggest fan, and so that's why I'm going to close out this episode by encouraging you to take care of yourself, like you take care of your community. See you next week.
Speaker 1 (26:34):
Thanks for listening. If you enjoyed this episode, subscribe and leave a review on iTunes. Head over to www.amberwynn.net/podcast for the links and resources mentioned in today's podcast. See you next time.
