Charitable Tax Deductions – a Non-Kneejerk Perspective For Social And Human Service Nonprofits

Last month, several proposals have circulated that involve eliminating tax deductions for charitable donations as part of the larger strategy to address the federal budget deficit. The Obama Administration supports, not for the first time, a re-design of the charitable deduction towards a tax credit. More detail on the proposals can be found here and here and one interesting economist's view here.

This discussion provokes kneejerk reactions from nonprofit colleagues and many well-meaning liberals who can’t believe that along with cutting social programs and nonprofit funding streams, now we are also planning to dis-incentivize charitable donations, causing more financial trouble for struggling nonprofit service providers.

Many observers in the last few weeks have written about the inherent “goodness” of charity, how it aligns with Christian principles, and how people should share their wealth and act charitable with or without tax deductions. Most people do in fact give without much regard for tax implications. I agree that they should. And data suggest that limiting the tax break does not reduce giving in the long term. But that’s not even the issue.

Publicly subsidized philanthropy is one of those issues that might find you on the opposite side of the opinion spectrum, if you do a little bit of homework.

The issue is one of political and economic theory. But first, let’s get the current system straight:

A taxpayer with an annual income over $250,000 has a 35% federal income tax rate. This person itemizes deductions on his/her income tax return, in order to minimize the income that is taxed at that rate. So s/he deducts her mortgage payment, business expenses and a charitable donation. The percentage that this taxpayer can write off for their donation is the same as their tax rate, so 35% for the high-income taxpayer. The $5000 check to the symphony orchestra creates a write-off of $1750, and tax savings of more than $600.

As a result, the federal government loses income tax revenue, currently estimated to be at $237 billion for 2009-2013.

A donation made by a lower income taxpayer can only be written off at the lower percentage that equals his or her tax rate, and the 70% of taxpayers who do not itemize their deductions cannot write anything off.

So, if you make $60,000 a year, and deduct your $100 public radio pledge, along with your year end donation of $200 to the local food bank or women’s shelter, this lets you write off exactly $75, resulting in tax savings of about $18. If you are part of the 30% of taxpayers who itemize, that is. I have to conclude that these smaller donations are apparently made for the sake of the cause, not the tax break.

Ok, so now we get how the system works, and it already doesn’t look that great or fair anymore…..However, part of the “homework” is also understanding the role of philanthropy in the context of the mainstream US economic philosophy. That is, the belief system that is based on “government is bad”, and so are taxes, and if you haven’t realized the American Dream, it’s probably your own fault. If you are wealthy, on the other hand, you should have as much say in how your wealth is spent as possible. Taxes give that say to the public (and its representative, the “bad” government). Donations leave it up to the donor. Philanthropy supports the current economic paradigm.

What the current charitable deduction arrangement does then, is put what otherwise would have been tax revenue in the hands of the wealthiest Americans, so they, not the federal government can decide, which causes the “shared” portion of their income supports. So instead of using income tax dollars to fund social programs (or socialist causes, as some would call them, aimed at the – god-forbid - redistribution of wealth, benefiting the poor), the dollars are used for the causes chosen by the richest Americans.

So what are those causes? The list of recent top donors kept by the Chronicle of Philanthropy, shows they gave to either universities/colleges, hospitals or other large health care organizations, as well as a few foundations. The database (of gifts $1 million and over) shows for 2010, that 201 gifts were made to colleges and universities (the biggest starting at $200 million); 36 to health (many of which are university hospitals); four (4) to human and social service organizations (totaling $9 million), six (6) to community foundations, one (1) to children and youths.

So this is the distribution of shared income when left to the (in this case, very) wealthy. If we look at this from an economic perspective, an often heard argument for continuing the tax subsidy states that the public benefit of these donations outweighs the loss to the US Treasury. However, because of the plutocratic bias of the donations, they do not create public goods [1] that are accessible to everyone, but rather goods whose beneficiaries are -- wealthy people . Philanthropy perpetuates the current economic model and its ugly side effect, the ever widening inequality of income and wealth.

Philanthropy is publicly subsidized plutocracy. I would not fret as much about the fact that the wealthy are funding “causes” that benefit the wealthy by itself. However the subsidy (i.e. the tax deduction) eats into the tax base that should benefit all citizens, and provide the underprivileged with the same chances at health, education and economic opportunity.

Instead of kneejerk reactions to the “threatened” tax deduction, nonprofits and their advocacy groups should engage in a discussion that reflects the social justice values of our sector, and that argues for differentiation in the definition of "charitable". A re-design of how we incentivize philanthropy could start there, include equal treatment of donors regardless of their income, and lead to a new system that benefits those affected by poverty, rather than those who are already wealthy.

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[1] The goods created are not public goods, because to be public goods they would have to be non-rivalous and non-excludable. Universities and health systems exclude people who are unable to pay for their services.

Beware of the Experts

Grant writing season has slowed to its annual wintery slump, allowing more time for some of the other services we offer through Z-A. In addition to several board strategic planning sessions, resource development trainings, and preparing next semester’s grant writing course at WNMU, we completed two applications for tax-exempt status for new organizations this month. I hadn’t done any of these in a while, and so as my clients and I were working our way through IRS Form 1023 (Application for tax-exempt, charitable status, aka 501(c)(3) status), I occasionally checked for online resources, hoping to find some templates or guidance, especially on the narrative portions. I found that pickings are slim. There is one website which gives a few hints, and provides one sample narrative. Then the site urges you to buy the author’s book, which promises more samples and links to narratives.

So, why does nobody want to share his or her insights on tax-exempt applications for free? Why are there not more sample narratives? Even the great new nonprofit sharing site IdeaEncore does not feature IRS application templates yet. What’s the hold-up?

My suspicion is that those “professionals” that assist start-up nonprofits in preparing their IRS applications (and file their articles of incorporation, and write their by-laws, and draft their policies, etc.) are making a good profit of it, and wouldn’t want this little secret to become public: It’s not rocket science. You can do it.

One of the client organizations that I worked with had hired a lawyer to file their articles of incorporation with the New Mexico Public Regulation Commission. This requires completing a one-page form and mailing it to Santa Fe. The price tag: $800. When I took over to help this small organization prepare their 1023, I found that the $800-lawyer had made the one mistake that will inevitably result in your tax-exempt application being turned down: He had failed to include the language required by the IRS into the Articles of Incorporation (relating to tax-exempt purpose and dissolution). He had also not included the charitable mission statement into the articles, but instead entered a sentence that in no way reflected any charitable purpose whatsoever.

During the same week, the CEO of another organization that I work with realized that her board would not have enough time to review the annual IRS Form 990 before it was due to be sent off. The contracted CPA had prepared a draft with numerous errors. Part VI of the form (the part with the questions on governance and disclosure) had all the wrong checks, and some of the numbers were questionable as well. I recommended that the organization apply for an extension with the IRS, so that the board would have enough time for due diligence. The CPAs response: you can’t file for an extension. My question: What is this person getting paid for? It turned out this CPA firm is not using the Internet for anything. (of course you can file an extension, and you should, if you ran out of time: IRS Form 8868 is available on the IRS website, can be mailed or filed electronically, and buys you three months)

These two examples illustrate the capacity gaps in the rural nonprofit sector and with those professionals nonprofits rely on. Often, rural nonprofits are run by people with marginal skills or little knowledge of how to start and run an organization. Nothing wrong with that… it’s the nature of the grassroots. Often these community leaders have even less confidence in their ability to figure things out on their own. So they hire the “expert”: a lawyer, or a CPA.

That’s when the trouble starts, because many of these “experts” have no knowledge of nonprofits either. Someone who is a lawyer or an accountant does not necessarily know nonprofits by virtue of his or her title or degree. In rural areas, CPAs have little access to professional development opportunities, and lawyers take all kinds of work, without specializing in something as marginal as nonprofit law. And apparently, some of them are quick to charge without taking any time to do their homework. (ok, disclaimer: there are of course, excellent firms in rural areas as well, including southwest New Mexico. But you have to look for them, and make sure they have experience with nonprofits.)

My advice: If you are starting a nonprofit*, educate yourself as much as possible, write your own drafts of organizing documents and other policies, with the help of templates, instructions and toolkits available on the internet. Maybe buy the book mentioned above. Call your peers (other nonprofits in the area), and ask for samples and templates. IRS Forms 990 are easy to find on Guidestar. 1023s are also documents open to public inspection, while not as widely available online. But you can request a copy of the 1023 from any organization of your choice, if it received its exempt status after 1987. Or you can request it from the IRS, using Form 4056-A.

If after all this research you are still unsure about your documents, find a vetted consultant and ask them for a cheap or free review of your drafts. Demand up-to-date knowledge and excellence if you do hire “experts”. Always closely review their work. And, once you are successful (as in, the IRS sends you a tax-exempt determination letter), share your templates. I will do that as soon as we get the IRS letters for our two clients. Look for it on IdeaEncore soon.

* the point in time at which people seem to not get enough advice is when the decision is made to start a new nonprofit in the first place. Often, this decision is not based on enough deliberation about purpose, need, market, funding and sustainability. But this would be the subject of a different blog post.

43 EX-Charitable Nonprofits- Watch who you donate to!

As of last Friday, 43 nonprofit, tax-exempt organizations in Grant, Hidalgo and Catron County, New Mexico apparently lost their tax exempt status with the IRS. (I have appended the local list below.) There are just as many nonprofits going out of business in Luna County. The total number of New Mexico organizations on the IRS list is over 2400. All of these groups didn't file their annual tax return, the IRS Form 990, in three years. By July, 292,000 organizations nationally had failed to comply, causing the IRS to extend the deadline one last time, to October 15th.

Be aware, this information is based on a list published by the IRS of all organizations in the US that were at risk of revocation, and on the assumption that these organizations did not follow up by last Friday. Some of them might have filed after the list was published, but I expect that most of them have had their status revoked now. We'll see the final numbers over the next few weeks. So what does this mean?

For donors: if you donate to one of these organizations, you will not be able to deduct the donation from your income for tax purposes.

For the organizations: They will have to pay income tax. If they wish to regain their tax-exempt status, they will have to start over and file a Form 1023 and pay a fee of $850 to apply for exemption. They will also lose their "good standing" with the NM Attorney General, who keeps a list of all "kosher" nonprofits, which is made accessible to the donating public.

For communities: We may lose some organizations that truly had benefit and a charitable purpose. But I suspect that these are few and far in between. The annual tax return for small organizations is a quick online postcard, not exactly a big onerous burden. If you can't comply with that, I am not sure how valid your organization is, frankly.

For the IRS: the agency will be able to clear their database of hundreds of thousands organizations who have seized to exist, or lack the capacity for compliance with section 501 (c) (3) of the tax code, for whatever reason. The IRS will probably experience a slight increase in applications for exemptions, as the organizations that goofed, but still exist, try to regain their status.

For social scientists and third sector researchers: This is significant, because "dead" organizations skew the statistics on the sector. IRS Forms 990 are public documents, and constitute the only solid primary data source on the sector as a whole. The Pension Protection Act of 2006 mandated that more than 714,000 organizations with gross receipts less than $25,000 need to file the new Form 990-N. This was an effort to keep better track of organizations, and researchers will welcome the results, I assume. I am curious, and hopeful that all over the country people are analyzing the impact of this "cleansing" on their data, and on their states and communities.

The researchers at the Urban Institute's National Center for Charitable Statistics have started this summer to review the non-filers, trying to categorize major groups and detect trends.

Many of their findings are true for our rural area. Nationally, a lot of civic associations are losing their status. In Silver City, this includes the Kiwanis Club, the Women's Club, and the Knights of Columbus. To my knowledge, these are active groups accepting donations on a regular basis. We are also loosing a Humane Society, the Scott Nichols Foundation, and two nonprofit incarnations of the WNMU Campus Ministry. Maybe they need some capacity building? Here's the list:

AMERICAN LEGION (Lordsburg)

BECAUSE HE LIVES MINISTRIES

BIG ALS OUTDOORS ADVENTURES

COLD SPRING PARK PROPERTY OWNERS ASSOCIATION

COPPER THISTLE PIPES AND DRUMS

FRIENDS OF THE OWLS INC

GILA TRAPPERS INCORPORATED

GLENWOOD AREA CHAMBER OF COMMERCE

GRANT COUNTY ASSOCIATION FOR RETARDED CHILDREN

GRANT COUNTY COMMUNITY SERVICES

GRANT COUNTY SOCIAL SERVICES COUNCIL

GRASSBANK INCORPORATED

HIDALGO HUMANE SOCIETY

HBNM

INSTITUTO PAZ EN LAS AMERICAS

INTERNATIONAL ASSOCIATION OF LIONS CLUBS (Lordsburg)

KIWANIS INTERNATIONAL INC (Silver City)

KNIGHTS OF COLUMBUS

KNIGHTS OF PYTHIAS OF NEW MEXICO

KNIGHTS OF PYTHIAS OF NORTH AMERICA SOUTH AMERICA EUROPE ASIA AFRICA &

KUSINARA

MIMBRES MUSEUM RESEARCH CENTER INC

MOUNTAIN STATES ASSOCIATION OF CYTOTECHNOLOGISTS

NATIONAL ACTIVE AND RETIRED FEDERAL EMPLOYEES ASSOCIATION

NATIONAL ASSOCIATION OF LETTER CARRIERS

NATIONAL SOCIETY OF THE DAUGHTERS OF THE AMERICAN REVOLUTION

NEW MEXICO FEDERATION OF BUSINESS AND PROFESSIONAL WOMENS CLUB

PARENTS ANONYMOUS OF SILVER CITY NEW MEXICO INC

PUBLIC LANDS ACTION NETWORK

RAINBOW MTN MED

SILVER CITY BASEBALL CLUB

SILVER CITY WOMENS CLUB

SILVER CITY-GRANT CO HOME BUILDERS ASSOCIATION

SILVER GOLF CLUB

SOL CENTER FOR PERFORMING ARTS INC

SOUTHWESTERN HISPANIC ROUND TABLE

THE BOB PAYETTE MEMORIAL ANIMAL FOUNDATION INCORPORATED

UNITED CAMPUS MINISTRY AT W N M U

UNITED CAMPUS MINISTRY AT WESTERN NEW MEXICO UNIVERSITY

UNITED VETERANS CENTER 806 BLACK ST

Starting off on the right foot, or: 8 ideas for recruiting board members

The big federal grant writing season is over, and there is some time before the smaller winter season starts. Much of my time this month is actually taken with spending a grant award from a proposal I wrote for the Silver City based Wellness Coalition in 2009: The now extinct Compassion Capital Fund Program, which provides capacity building to nonprofit organizations through sub-awards, training and one-on-one technical assistance.

I am providing the one-on-one TA piece to four different nonprofits, and in particular their boards and executive directors this month. I am helping with amending by-laws, training new board members, putting together an application for 501(c)(3) status, coaching staff through a complex grant proposal, training the ED on board roles and responsibilities, tailoring sample policies, reviewing marketing materials, advising on an innovative fundraising campaign, and, with every one of these organizations, providing advice on board attendance, retention and recruitment.

On the latter subject, here’s the type of laments I keep hearing, over and over: How do we make them show up? Our board president has not been to four meetings in a row; our board has not had a quorum in several meetings; our board members are so old I don’t know if they are alive (someone really said this!); our board members won’t participate in any fundraising activities; the XYZ committee has not done a thing in a year; our board members have no clue about their legal duties; there are too many potential conflicts of interest bogging down out board; an organization similar to ours in California has 28 board members, and we can’t even get our five to attend meetings.

The last comment illustrates the particular struggle nonprofits in rural, low-income areas face, as described previously here. We lack the large pool of highly educated urban lawyers, educators, doctors and other professionals that typically serve on boards. The few that we do have are in high demand, and often feel compelled to serve on three or more boards.

I have come to the conclusion that most of our governance gaps are caused at the moment we recruit new board members.

As I am counseling clients on these issues, some patterns and strategies emerge. Some of these are at the idea stage, and have not been tested at a large scale, while some have been successfully tried in organizations I work with. All of them are based on the premise that an effective and engaged board originates with recruiting the right people, and that we need to go past the traditional recruitment strategies. And on the premise that if in a rural area, expertise is rare, go for enthusiasm.

1. Don’t talk your friends and family into joining your board.

They’ll join to do you a favor, not because they believe in the mission.

2. Recruit people who are users of your services.

They believe in your mission, and they can testify about the need for the services.

3. Recruit young people.

They bring enthusiasm, and the ability to learn, as well as innovative ideas. They’ll be motivated also by adding a civic engagement to their resume.

4. Recruit retirees as a potential source of expertise.

Just don’t make them your only type of board member.

5. Don’t downplay the board’s roles and responsibilities in the recruitment talk.

Be honest about what you expect. Educate about legal duties before someone joins. Talk the wavering candidate out of it.

6. Don’t beg.

Market serving on your board as an opportunity and a privilege.

7. Don’t accept candidates who serve on more than one other board.

A director can’t do justice to more than one or two organizations, both in terms of time and loyalty. Be careful about recruiting people who show any signs of over-commitment.

8. Train the new members.

Make new board member training mandatory, even if they say they have governance experience. In the training include your by-laws, the organization’s mission, history, financial status, and policies. Then have someone from outside the organization give them the “Basic Roles and Responsibilities of Nonprofit Boards” training.

Clearly, in our community, the standard “1 banker, 1 public official and a few close friends” -type board of directors is not working. I’d be curious to hear from other rural nonprofit professionals about innovative board recruitment.

It's Better Over Where?

As I am reading the late great Tony Judt’s “Ill Fares the Land” (jumping up and shouting YES! every couple of pages…) , out comes another book comparing European social welfare states with the American model: Tom Geoghegan’s “Were you born on the wrong continent?”

Based on Geoghegan, I was born on the right continent, but must have temporarily lost my mind and moved to the wrong one. How could I leave a place providing guaranteed vacation time, free education, free child care, free nursing home care and generous unemployment payments?

I have lived in the United States for many years now and “the country” has been good to me. I have been able to pursue a diverse career of my choice, changing jobs and locations in a way that would have made me an outcast on the German labor market. I have been able to make a decent living (in large parts thanks to that free German education putting me ahead of Americans, financially and in terms of basic skills), raise a family and live in a beautiful place of my choice. Working in the nonprofit sector, my work has made real change in local communities, people and policies in a way that would not have been possible in the more static German welfare and political system.

The country has been good to me. So I will not join too loudly the choir of people on all the social media networks and the press who took the publishing of Geoghegan’s book as another opportunity to complain about how terrible this country is. I feel more at home in Tony Judt’s camp: Looking at the welfare systems through his vast historical perspective (a European who lived in the US by choice, like myself) many of the paradoxes on both sides of the ocean make more sense. For example, he reminds the reader that neoliberalism hasn’t always ruled American political thought and decision making: “ …, much that was best in American legislation and social policy over the course of the 20th century – and that we are now urged to dismantle in the name of efficiency and “less government” – corresponds in practice to what Europeans have called ‘social democracy’.” He explains why even in countries like Germany, middle-class support for the social democratic model is now waning. And he chastises our generation with having missed a great opportunity: After the fall of communism, “we sat back and congratulated ourselves upon having won the Cold War: a sure way to lose the peace. The years from 1989 to 2009 were consumed by locusts.” Thirty years of erosion of social policies in the US have made the country more unequal “ … - in incomes, wealth, health, education and life chances - than at any time since the 1920s.”

And here’s a big point (one of several) on which Judt and Geoghegan “agree”: Poverty (Geoghegan) and inequality (Judt) corrupt society, endanger democracy, and ultimately undermine the economy: “Inequality is corrosive. It rots societies from within.” Judt explains the emergence of the social democratic systems after two world wars in Europe partially as a way to avoid another catastrophe. Geoghegan shows that poverty carries a tremendous cost to US society and economy.

Here's a West-German Cold War quote a fellow German expatriate reminded me of “ Geh doch nach drüben!” which is what German conservatives used to say if someone in post-war West-Germany was too lefty, meaning, go to Communist East Germany. The reviewers that have praised Geoghegan’s little book are now getting the same comment: “go there, if you like it so much better than the home of the brave and the land of the free….”

Meanwhile, I am running out of the benefits my European free education provided me: A large portion of my salary goes towards the private education of my younger children, because where we live, school districts are too underfunded to provide a solid public education. Our teenagers go to the local college to make up for what high school does not offer. This means, I am putting away no money for my retirement, let alone a graduate education for our children. The secondary education they get here does not adequately prepare them for the (free) higher education programs in Europe. So, is it “Geh doch nach drüben” time? should we move our family back to Europe?

We have not made that decision. Maybe the question is not, where is it better, or, where would we be happier. One of the challenges for us 21st century homeless cosmopolitans might be to find a way to be at home in both worlds. Not only from an individual perspective, taking advantage of the best of both worlds and avoiding the worst. But also from the perspective of ambassador between the worlds, showing our fellow citizens on both sides of the Atlantic what is dear to us and worth transferring to the other side. The freedom of making creative choices in one’s life and one’s community from the US, and the solidarity of social democracy that affords everyone the chance to do so, from Europe. Judt the European and Geoghegan the American do a good job bridging the Atlantic for this discussion. Everyone should read their books.

Policy Peptalk

I am enjoying teaching nonprofit management as part of a political science degree program. And not just because it neatly integrates my education with my profession. But because it makes a lot of sense.

As Leslie Crutchfield and Heather McLeod Grant have aptly explained in Forces for Good, successful nonprofits operate in both spheres of nonprofit activity: advocacy and service. Operating in just one of those spheres seems to limit impact over the long term. I can confirm this from my private practice. In particular when it comes to trying new approaches, service models and practices, I have seen those nonprofits fail that did not align their new service approaches with policy and advocacy activities at the state and/or federal levels.

I think this might be especially true for nonprofits operating in states like New Mexico, where there is not much philanthropic involvement in social innovation. We have to rely on government for paving the road to innovation with funding.

In this week's session of POLS-380, Intro to Nonprofits, we talked about the regulatory and policy environment nonprofits operate in. We came up with a list of developments that are currently influencing the sector:

• Increased regulatory pressure around the public trust (as manifested in new Form 990)
• Trends towards taxing NPOs at state and local levels (property tax and municipal fees)
• Federal tax law related to charitable donations, deductibility, estate tax law, regulations for foundations
• Federal laws related to lobbying
• Federal policy developments and attached funding streams around Social Innovation, replication of successful practices and Capacity Building
• Changes in priorities and funding streams at both state and federal levels for specific fields (such as disabilities, health services, education)
• State fiscal crises
• Larger policy developments and how they affect the sector: Health Care Reform, Recovery Act, Jobs Bill
• Hybrid corporate forms: LC3s (low-profit, limited liability) and B (benefit) corporations
  

Unlike some fellow bloggers, who see these developments as threats and occasion to proclaim the impending demise of the 501(c)(3), I think most of these can be opportunities for the nonprofit sector:

• The new 990 puts more emphasis on the role of boards as keepers of the public trust. With 990s becoming more accessible though Guidestar and nonprofits’ own websites, this move towards transparency and accountability can only be welcomed.
• The much blogged about blurring of the lines between sectors (LC3s etc., which in fact only exist in a handful of states so far) should be seen as an opportunity for nonprofits to point out their special advantage: Rootedness in the community through community-based boards, combined with public accountability controls most for-profit corporations are not subjected to.
• State funding cuts are the one real and dangerous threat to nonprofits at the moment (an excellent analysis of how state fiscal woes affect nonprofits was recently published by the Nonprofit Quarterly). So are, I imagine, declines in philanthropy dollars as experienced by nonprofits in more philanthropy-heavy areas. Not much opportunity to be found in being the bearer of the bad news to vulnerable populations, having to cut them off from services due to state funding cuts. The only opportunity lies in learning to become better advocates for ourselves and the people we serve.
  

As we are teaching this nonprofit class, apart from knowledge, we try to instill sector consciousness and a sense of pride in our future nonprofit leaders. A consciousness based on the ethics of accountability to the community and the public trust that come with being a community-based 501 (c)(3). And we also try to get across that unless you are able to communicate the value and advantage of your nonprofit and/or charitable organization and its work in a variety of policy environments, you will probably not have much impact.

Ecosystem's not changing in rural nonprofit America

Here is my response to Lucy Bernholz's recent blog post: In a Changing Ecosystem, Whither Nonprofits?:

While I have enjoyed reading Lucy’s posts for a while, I always struggle to find them relevant or applicable beyond the bi- coastal philanthropic consultant blogger and professional conference attendee worlds.

In rural NM, where I work with social innovators, we too closely watch policy developments. Sector “agnostic” sounds buzzy, but the sector relationships we are concerned with now are strictly between government and nonprofits: state funding cuts affecting nonprofit service providers and cuts in state subsidies to low-income residents are the development that worry my clients in these weeks. All the blogtalk of social capital markets, social investors, tactical philanthropy, hybrid corporate forms… remains inconsequential blogtalk to us.

Foundations in New Mexico have been close to irrelevant regarding social innovation for many years now (with a few exceptions, such as the NM Collaboration to end Hunger), and this year in particular they have resorted to distributing minuscule grants to a very few nonprofits, with no social impact expected. Corporations in New Mexico so far have not stepped forward to provide leadership in any cross-sector innovative projects. I imagine this is true for many non-coastal and rural states.

So… our questions are different from the ones that Lucy is asking: How can social innovation happen through rural nonprofits that are 90% dependent on government contracts, and are mired in vendorism? How can we develop effective networks across sectors, while building the capacity of individual nonprofits? How can we participate in federal initiatives such as the Social Innovation Fund, that are already set up to work through large intermediaries, i.e. foundations, in the absence of a wealthy, progressive foundation community?

Not much bathwater left in our tub, Curtis!