Using the Whole Whale - A Nonprofit Podcast

Why Fiscal Sponsorships are the smartest way to start a nopnrofit

Interview with Andrew Schulman of Schulman Consulting.

Here are some key points about fiscal sponsorships from the conversation:

- A fiscal sponsorship allows a new project or group to operate under the legal and tax-exempt status of an existing 501(c)(3) nonprofit organization. This avoids having to incorporate separately and apply for 501(c)(3) status.

- The fiscal sponsor provides back office services like accounting, HR, legal compliance, and manages fundraising so the sponsored group can focus on programs.

- Sponsors typically charge an admin fee of 8-12% of funds raised. Some charge a % of expenses instead. This covers their management costs.

- Good for getting started quickly, building a track record, and testing an idea before launching a standalone nonprofit. Provides credibility.

- Downsides are less autonomy, fewer funding sources, can’t get some nonprofit discounts, and sponsors add rules/oversight.

- Suggested to use a fiscal sponsor if raising over $50k in first year or don’t have nonprofit management experience. 

- Most sponsors want to help projects succeed and transition to independence. Process takes 3-6 months after getting 501(c)(3) status.

- Fiscal sponsorships should be the default first step before creating a new 501(c)(3) since it simplifies startup.

In summary, fiscal sponsorships allow faster startup in exchange for some autonomy but are a great way to incubate and test a new social impact idea.

Why Gov Shutdowns Hurt Nonprofits (news)

Ouster of GOP Speaker Hampers Ability of Congress To Function Amid Looming Shutdown

The ouster of House GOP Speaker Kevin McCarthy nearly two weeks ago continues to hamper the ability of the legislative branch to advance policy, even as the spectre of a government shutdown continues to loom large. Nonprofits like the National Low Income Housing Coalition say that the shutdown (which would go into effect on November 17th) as well as the current political standstill and dysfunction threaten what they percieve as must-pass legislation related to HUD and housing assistance, which advocates say need to increase every year as the cost of living goes up. The volatility of the status of the government (a shutdown would pause non-essential government services) has put nonprofits on edge. Food banks can expect increased demand as hundreds of thousands of government workers and contractors go without pay, and programs like WIC and SNAP are at operational risk in long shutdowns. The Chronicle of Philanthropy also cites domestic violence shelters as also vulnerable to shutdowns because many rely heavily on government grants.

How GPT Ruins the RFP Process & How to Solve

Nonprofit RFPs vs RFCs

 

[00:00:00] . Following on with our favorite guest of the moment right now, Heather Yandow, of course, founder of nonprofit.ist, nonprofit ist, and consultant at third Space. We are talking about whether or not, because this has been coming up a lot, will G p t destroy RFPs? And I know you are the, like captain of the team, of folks that think RFCs request for conversations are superior and many ways to RFPs request for proposals.

[00:00:54] So we're gonna throw a lot of acronyms out here. Where and how do you think our conversation since the last time we had it with regard to R F P? Versus R F C is in the landscape now of G P T. So I think it's just gotten more complicated, more muddy, and I lean even more towards requests for conversations now.

[00:01:17] You know, one of the things that I have already started seeing is chat, G P t AI generated cover letters. So I just hired for a position. Hmm. And one of the cover letters was clearly generated by ai. It used exactly the same language, and it didn't mention that the person who was applying had a personal connection to me.

[00:01:39] So to those, those were red flags. Didn't even have to use any tool, just read it and thought, this is not right. So we're already starting to see it. I suspect that if I was a nonprofit putting out a, a request for proposals, I would've already gotten some that were AI generated. So it's becoming, RFPs in my opinion, are becoming increasingly useless, increasingly challenging when the goal is to actually find the right consultant to help you with your challenge.

[00:02:10] For sure. I think, you know, we're using G P T synonymously with any generative AI tool that will create an output based on an input. I think there are ways of designing this, but I think there are tiers, right? Mm-hmm. I think, frankly, legally speaking, if you have government funded projects you have to solicit for, and with RFPs, request for proposals is just part of the game.

[00:02:35] You need three competitive bids. And that's just how the government cookie crumbles. Yep. There's a lot of white space below that though, however, where, you know, I see small projects, we'll call them projects under 60 K or even under 30 K, where if you put out an R F P, like is disturbingly easy to generate a proposal?

[00:02:56] Like I have a proposal generator for for whole whale. I don't use it because it's just not how we go about it. But let's say I was a do anything now shop. Literally, I could just go through, copy a proposal, put it in, see if I get it, and then go forward. And I think there's real risk of having massive you know, signal to noise issues in that process.

[00:03:20] Does, how does that land for you? Yeah, I absolutely think so. I mean, you know, putting together proposals. Is super time consuming especially for small shops. You know, there are two and a half of us, so to muster the resources it takes to put together a really good proposal is a heavy lift, and I can absolutely see why using chat G P T or something else, like it would be really attractive, right?

[00:03:48] It's certainly going to reduce the amount of time I'm gonna have to spend writing. It can be a, a good jumping off point. I think that what we're likely to see is that those. Organizations who can take advantage of it. So particularly those organizations, those nonprofit consulting firms who have people who write proposals are gonna probably take advantage of it.

[00:04:11] And George, they might be, you know, doing it with all of the respect and within the bounds of good AI usage, which I know you think and talk a lot. But I do think it's gonna create more proposals and not necessarily more useful proposals for nonprofits to review.

[00:04:28] Yeah, I think all roads lead to conversations, though. They do. I think at some point, you know, you'll vet, you'll go through, there's just a lot more processing that ends up happening on the nonprofit side, albeit ironically, you could also use AI for synthesizing that. And we end up back full circle to just have the conversation front.

[00:04:47] Have, have the, you're gonna have to have it anyway. So being like our, you know, like our request for information or intent could lead to a conversation round and. That would maybe filter out a lot of this because the number of proposals you are going to get is simply gonna increase over this threshold because it's so easy.

[00:05:06] Literally. Yeah. If you are saying like, oh, he's talking about some advanced technical thing. Here's what I want you to do. If you're a consultant right now or if you're a nonprofit, I just want you to understand how simple this is. You just go on ideally to check GT four or Anthropic. If you have an account there, what you're gonna do is prime the conversation with who you are, what you do, and the role of that ai.

[00:05:27] The next thing you're gonna do is here is a sample of the structure of my proposals. Here's a couple case studies now. That you're clear, please write a and respond to the following context of this new proposal. And you're gonna toss that in and you're gonna end up with something that's disturbingly good as a first draft.

[00:05:47] And frankly, if you're lazy, just send it as mm-hmm. Whatever your first, your, your final draft. Uh, I do, as you mentioned, talk a lot about keeping human in the loop as soon as you send it out to the world, if it's. If it is all within your control, please, please make it a first not final draft policy of using AI and keep humans in the loop for now when exposing LLMs publicly to individuals especially if you are in I'd say crisis or trauma adjacent conversation.

[00:06:19] For, for folks, what is L L M? Large language model. I feel like this is just alphabet soup. Uhhuh, you're a generative AI thingy. It like there's nuance, there's fine. It's what we're talking about. So going back to that, what you're gonna do is create that. Now, if you're on the nonprofit side, here's how you go about it.

[00:06:37] You say you are a selection criteria. AI that evaluates proposals for our organization. Here is the proposal we created. Now, evaluate this and break out based on price, competency likelihood to deliver on time elements, and shove it into the spreadsheet for me. And ta-da. You're just gonna go back to having.

[00:07:00] A conversation. A conversation. Absolutely. Absolutely. 'cause it's, it's not buying the best digital camera, right? It's not a spreadsheet able thing. Finding a consultant, most of the time you actually wanna know if you're gonna be able to work with this person. You wanna have an understanding of who they are, of what their personality is, of what their style is, and.

[00:07:19] Certainly we talk about that in proposals but it comes back to having a conversation and really seeing where that conversation goes. And that's something AI at least currently can't actually do for you. No. And the truth is, you're gonna be working with a person, not an ai. That's right. Uh, one of the things I do and have always loved about non-profit is, is that you can just go shopping for folks and just say, Hey, I wanna have a quick conversation.

[00:07:44] One click sends them a message so that you're like, all right, look. I have this fundraising campaign. I could put it on our feet. Lemme just talk to a few folks and see That's right. What they think about the project. What am I missing in here and how do I go about that? Yeah. Yeah, absolutely. And that's, that's, we designed it that way on purpose, right?

[00:08:02] It's people's pictures there, not their logos. We know that you're connecting with a person and we wanna make that as frictionless as possible. Call 'em, email 'em, send 'em a message through the site, any way you wanna get in touch with them. And then yeah, have that conversation. What does this look like?

[00:08:20] What do you think? What are the questions you have for me? What would the timeline be for this? Yeah. And I, I do think there's some risk as well, which is why I want more foundations to do this. I'm to, to pay attention and to communicate to grantees about the, the risks here, because when you go out there with.

[00:08:40] An R F P, you can get a lot of inbound and potentially unethical inbound where folks can just sort of fake it till they make it, but they're using language borrowed mm-hmm. Stolen from other groups or agencies, and they can mimic that style and confidence. And suddenly, you know, you're, you're selecting a an inferior option or someone who has no clue what they're doing, but the jargon lines up just fine.

[00:09:04] So you're like, oh yeah. And. Oh, they're half the price isn't that nice? Like Uhhuh. Uhhuh as many times as you need to. You get what you pay for. Yeah. You'll learn that it's an immutable truth. It is. And you know, obviously having conversations is gonna help break through that. And then always checking references.

[00:09:22] Who else have you done similar work with? Can I talk to them? Let's have a conversation with those folks about what the experience was like working with these people. Yeah. I don't know if there's any other points in here. I have already just broken the entire system by literally explaining how to build a R F P generator and then R F P proposal evaluator, so that you just have this little disturbing, dystopian mm-hmm.

[00:09:47] Cyclical behavior. But you know, to come back on, you know, where this sort of started requests for proposals, RFPs are so anachronistic like they date back because in the industry of the 1880s, they needed to put this stuff in papers. So they needed to put it in a paper to be like, here you go. All come, come find my, you know, my road construction project or train my railroad construction project, Uhhuh.

[00:10:13] And it wasn't until the 1960s, thereabouts, where the government really adopted this as a standard practice for large purchasing projects. Yes. Government size stuff. Yes. Not. Tens of thousands of dollars, right? Yes. You're like, oh, it's so much money. It's not, it was created when the government's about to spend, you know, you know, X millions, hundreds of millions of dollars.

[00:10:37] That's what it was designed for. The government, as you remind, like I I said, is like, is requirement when you give to a nonprofit and use government dollars, like, oh, no, no, you gotta do that. R F P process. Mm-hmm. But understand that's where that comes from. That's where that comes from. And there's, there's a belief that that's the right way to do it.

[00:10:57] That's the professional way to do it. That's the equitable way to do it. And I would argue for all of those, that's, that is not necessarily true. It is not always the best way. It is always not always the most professional way, and it's certainly not the most equitable way to find someone to work with.

[00:11:15] Yeah. I don't know. Maybe to play the other, other side here potentially. One of the things that, when you use the word equitable, in my mind it, it means you have to have the capacity and resources and capability to go about the very lengthy process of creating a proposal. Yeah. And that process. And there's many folks in the nonprofits network that like definitely bristle.

[00:11:38] They don't even like go after. Yeah. They're like, no, no, no. I won't even bother. Which means you've already precluded a lot of qualified candidates from applying. That said, I just explained how you could create a proposal builder so that you could get to the conversation. May, maybe the, maybe there's a bright side there.

[00:12:01] Maybe there's a bright side there. I, you know, I'm one of those folks who I, I, I don't do cold proposals. And that doesn't mean necessarily that I have worked with a nonprofit before, but I need to at least be able to have a conversation. Very rarely. Does a two or four page R f P have all the information I need to know even what to pitch as a first option for how I might be able to support this organization.

[00:12:26] I often have lots of questions. I wanna know a little bit more about the history. I wanna know about why now. I want, you know, I wanna understand why the budget is where it is and what the board's buy-in is things that people don't often write down in their request for proposals. So even that first conversation again, Warming it up a little bit, having a sense of who's really there, what the real challenges are is, is super helpful.

[00:12:52] I will say for Whole Whale that we do respond to RFPs, but only if there was a conversation first. Yep. There you go. Like everything starts with a conversation just to make sure we're aligned. Yeah. Are we in the ballpark? Is our type of service, meet your type of need and. We do churn out a lot of proposals.

[00:13:10] However, they're much more like project plans, like mm-hmm. We literally take that we and move that into a contract parts of it and say, this is what we're gonna execute on. 'cause that's what we talked about. And you know exactly what you get. So you're already doing pragmatic work now? Yes. We, uh, we do lose a number of proposals.

[00:13:29] But that's, you know, that's part of the game. Yeah. And I think of them less as proposals, maybe more as like project plans to make it. More tangible. Mm-hmm. Mm-hmm. Yeah, that makes sense. That makes sense. We often put together proposals that are those project plans, and then the very, if we get the work, the very first piece of that is let's actually dig into this project plan and figure out if it makes sense.

[00:13:51] We were basing this on an R f P in a 20 minute conversation. Right. Like, we don't, we, we need some more information. Well, I'm excited to put this out there. I think the more we talk about it, it's just like, it's like this quiet secret and you're like, oh. Mm-hmm. Like nobody knows that a hundred million plus people are using G P T tools to like write all manner of thing.

[00:14:11] Like we know Yes. We just aren't talking about it. Yes, yes. You know, it's like if the, if the teacher in the classroom accidentally left the entire answer key on the chalkboard while you took the test and everyone was like, Is anyone gonna tell the teacher that it's there? Like, can we just start having this conversation?

[00:14:29] We know it's happening, we know it's going on. And by the way, if you're doing it lazily, if you're doing it in a poor way if you're ever curious, you can go to tools like G P T Zero. Put in that text and you're gonna get a what's called perplexity and burness score, which is, uh, was this probably created by, uh, an AI or not a generative ai or not.

[00:14:52] Uh, and so if you are bad at prompting, if you're doing this in a lazy way, uh, it's very much detectable. Mm-hmm. But you don't realize that. But people that know, know, mm-hmm. And I, I, you know, The plus side is there's lots of ways that these tools can help us as nonprofit consultants. You're actually doing a webinar on that very soon.

[00:15:12] There's lots of ways that these tools can help nonprofit leaders. So there is a positive side. Just, yeah, be careful with the RFPs. Agree to agree. All right, Heather, all, thanks again. Thank you. And folks can find you at nonprofit, do IST nonprofits. That's correct. And thanks for the community you're building.

[00:15:30] Thanks, George.

(news) War Breaks Out In Irsael & GivingTuesday Predictions

War Breaks Out In Irsael & Gaza, & What It Means For Nonprofits

A horrific terrorist attack by Hamas into Israel ignited the region into chaos and war, making the prospect of peace seem ever more distant. The ground invasion by Hamas (the de facto government of Gaza) shocked Israel and the world. As of writing, more than 700 Israelis, largely citizens, had been confirmed killed, and more still taken hostage. Hundreds of Gazans have also been killed in both the fighting and subsequent air strikes. At a time of great uncertainty, upheaval, and violence, communities with relations to the region at conflict will be especially burdened by grief, worry, and mourning. Jewish communities in America, already feeling increased antisemitism, are further reeling from the psychological impact of among the deadliest days in recent Jewish history. Civilians and their diaspora communities of all those with ties to the region — Israelis, Jews, and Palestinians alike — will need increased support from communities and nonprofits especially as the region moves from fragile peace to likely war. The next couple of weeks and months will also result in heightened engagement, calls to action, and other activities that come with a region slipping into war, with the possibility that year-end giving could be shaped by the conflict, particularly for organizations with ties to communities affected.

 

Read more ➝

 

GivingTuesday Predictions: $3.45 Billion

Whole Whale, the publisher of this newsletter, has released its annual GivingTuesday predictions. Based on an analysis that incorporates an adjusted linear regression, trends in Google Search terms around “GivingTuesday,” and national giving trends, Whole Whale predicts that $3.45 billion will be raised on GivingTuesday 2023. Approximately $3.1 billion was raised in 2022 from 37 million participants. Whole Whale’s prediction represents a forecasted 11% increase in donations year over year. Whole Whale cites negative indicators stimying growth as continued inflation concerns, macro giving trends, and a decrease in net search interest. Positive indicators in favor of a strong giving cycle include low unemployment, strong consumer confidence despite inflation, and new untraditional vehicles for donation like cryptocurrency.

• Global: ‘Predator Files’ spyware scandal reveals brazen targeting of civil society, politicians and officials | Amnesty International Security Lab 

• Men Overran a Job Fair for Women in Tech | WIRED 

 

NYC Floods Underscore Lack of Climate Resilience In America’s Biggest City (news)

NYC Floods Underscore Lack of Climate Resilience In America’s Biggest City

Floods last week left New Yorkers bewildered, as typically dry streets became overrun with water as documented in videos and pictures. The floods, which particularly impact Brooklyn & Queens, renewed calls from New Yorkers to double down on climate resiliency in America’s most densely populated city. At one point on Friday, virtually *all* New York City subway lines were fully or partially suspended, grinding the city to a halt. Migrants who had exhausted their legal right to shelter were unceremoniously dumped into the rain before the city reversed course. As New Yorkers figured out how to get home, many wondered aloud how their city would work to build resilience as storms like this become the norm in the face of climate change. The city already began investing heavily after Hurricane Sandy decimated lower Manhattan, resulting in long-term efforts to reinforce the island’s lower shoreline and coastal resiliency. Read more about the multi-billion dollar efforts to make lower Manhattan, FiDi, South Street, The Battery, and other immediate neighborhoods more resilient.

 

• Video: See Flooding in Some of the Hardest-Hit Areas of New York

  www.nytimes.com

• Medical Debt Has Always Been Part of Nonprofit Hospitals | TIME 

• A nonprofit wants sharpshooters in helicopters to kill over 2,000 invasive deer living on California's Catalina Island | Yahoo News

 

Lithium Reserves Pit Climate Resilience Against Indigenous Calls To Protect Land (news)

Lithium Reserves Pit Climate Resilience Against Indigenous Calls To Protect Land

Lithium reserves discovered in 2020 have recently renewed excitement over the United States’ ability to be self-sufficient when it comes to mining lithium, according to reporting from Insider and others. Newly-released findings suggest that the volume of lithium is among the most concentrated of known deposits, and could make the site a strategic goldmine for the United States from an environmental, economic, and national security standpoint. However, indigenous groups counter that the deposits are on land vital to indigenous use. “There's burial sites there. There's medicines and roots there, there's ecosystems – there is still life back there," Gary McKinney of the Shoshone-Paiute tribe told Al Jazeera. Construction has already started at the site to prepare it for mining — with federal courts dismissing activists and conservationists legal challenges to cease the project.

 

nonprofitnewsfeed.com 

 

 

Climate Protests, Ashton Kutcher resigns, and FB Fundraising updates (news)

UN General Assembly Marked By Climate Protests Both In U.S. And Abroad

On September 16, 2023, thousands of climate change protesters, predominately youth activists, poured into the streets of Lower Manhattan as part of a global week of demonstrations leading up to the UN General Assembly, according to The New York Times. The New York protests specifically targeted Wall Street, with activists blocking traffic, staging sit-ins, and demanding governments and corporations take bolder action on climate change. Speakers accused Wall Street of financing fossil fuel projects that contribute to the climate crisis and called for divestment. The demonstrations remained largely peaceful despite arrests, capping a week of worldwide youth climate strikes and protests aimed at urgently pressuring leaders to address the climate emergency. Climate activists, especially “Just Stop Oil” members in Europe, have made headlines for seemingly aggressive tactics that critics say undermine their cause.

 

 

Read more ➝

 

• Berlin's Brandenburg Gate spray-painted by climate activists | Reuters

• Ashton Kutcher resigns from anti-child sex abuse nonprofit after Danny Masterson support letter backlash | Fox News

• Facebook Fundraisers No Longer Provide Free Processing | Whole Whale

Day of Service for 9/11 & Pay Gap at Nonprofits (news)

Opening of New Performing Arts Center Coincides With Commemoration of The Events of September 11th

Every year, the week of September 11th is a week of commemoration. New York is filled with stories of this day — stories of loss, of bravery, of sacrifice, of reunion. But perhaps most visible, the physical World Trade Center, yes a place of reflection and commemoration, is also piece by piece becoming a place that has been rebuilt in the spirit of American persistence.

 

The WTC, operated by the Port Authority of New York & New Jersey, has announced the opening of its new performing arts center, as reported by AP. “The memorial is here for people to come and grieve and pay their respects. The museum is for people to learn, be aware and never forget,” says Khady Kamara, PAC NYC’s executive director. “And the Performing Arts Center is here for people to celebrate life and really celebrate the resilience of New Yorkers and of the country.”

 

The opening comes at a time when arts have struggled in the City, and could provide a meaningful jolt to the creative ingenuity that in many ways defines what makes New York great.

 

Other efforts to turn tragedy into action and resilience are highlighted by the work of nonprofits like 9/11 Day, which encourages folks do good deeds each year. It has become the largest day of service in the United States.

 

Read more ➝

Summary

 

• Candid's 2023 Nonprofit Compensation Report finds female CEOs make 73 cents for each dollar male CEOs make  | Benzinga

• Renee Bach Documentary ‘Savior Complex’ Previewed in First Full Trailer – Rolling Stone  |  Rolling Stone

• How to donate to Morocco earthquake victims | The Washington Post 

   

Elon Musk blames Anti-Defamation League For... (news)

Nonprofit Brings NARCAN over-the-counter

A lifesaving medication that reverses opioid overdoses will soon become more accessible, thanks to an innovative nonprofit company. Harm Reduction Therapeutics has received FDA approval for RiVive, the first over-the-counter naloxone nasal spray created by a nonprofit.

 

Available in early 2024, RiVive aims to save lives by providing broad, low-cost access to this critical drug. Unlike big pharma, Harm Reduction Therapeutics is focused on equipping hardest-hit communities – not profits. At least 200,000 doses will be distributed free of charge where they are needed most.

 

This creative approach could be a game-changer in expanding access to naloxone, a medication that can mean the difference between life and death for those experiencing an opioid overdose. Harm Reduction Therapeutics exemplifies the power of nonprofits to drive real change.

 

Read more ➝

 

• Elon Musk blames Anti-Defamation League for ad sales slump, threatens lawsuit  | Axios 

• More schools that forced American Indian children to assimilate revealed  |  Washington Post

• Worker defrauds Massachusetts nonprofit out of $100,000 worth of Apple laptops, officials say  | WCVB Boston

From Dark Money to Digital Petitions: Reclaiming Government With Tech | MapLight.org

Daniel Newman, president and co-founder of MapLight, joins to discuss how their technology improves government transparency and direct democracy. MapLight builds software for state and local governments to provide easy public access to campaign finance data, e-signatures for petitions, and other services. Their goal is to counter the undue influence of money in politics by empowering citizens and journalists to hold officials accountable. Newman argues digital petitions could enable more grassroots, people-powered ballot initiatives. However, institutional resistance and polarization often block reforms, even those that would help voters across the political spectrum. Newman wrote the book Un-Rigged to explain major democracy reform issues in an accessible, solutions-oriented way.

 

Links:

Maplight.org

Un-Rigged Book

Daniel on LinkedIn