Non Profit Space - Connecticut and New England

Part
01
of three
Part
01

Nonprofit Space: Connecticut

The insights related to the nonprofit space in Connecticut in the areas of corporate governance, organization structure, communication, and fundraising are below. For example, based on the most recent research, donations from foundations and individuals to nonprofits in the state were $1.2 billion and $3.48 billion, respectively, in 2015.

CORPORATE GOVERNANCE

  • As pertains to the standard of care, a director should discharge his or her duties as a member of the committee in good faith, rely on opinions, information, reports, or statements prepared by the nonprofit's officers, legal counsel, and public accountants, he or she deems to be competent.
  • When a director (or family member) has a conflicting interest in a transaction involving the nonstock (nonprofit), the director must not participate in the vote, but can "generally outline the procedures the corporation may use to obtain effective action on the transaction even though he has a conflict."

ORGANISATION STRUCTURE

  • The organizational structure of a nonprofit in Connecticut consists of a board of directors, executive, and administrative positions.
  • A minimum of three directors, not related to each other, together form the board of directors. Their term runs until the next annual meeting.
  • The executive and administrative positions must have a minimum of one officer each, including a president (executive) and a secretary (administrative).

FUNDRAISING

  • In their most recent research, the Connecticut Council for Philanthropy found that donations to nonprofit organizations in the state rose from $1.02 billion in 2014 to $1.2 billion in 2015, for foundations, and $3.4 billion to $3.48 billion over the same period, for individual donations.
  • Nonprofit organizations in Connecticut receive at least some of their funding through grants like the ones provided by the Serve Connecticut, the Connecticut Commission on Community Service (CCCS), which recently awarded "$2.3 million in federal AmeriCorps State & National funding to eight Connecticut organizations serving residents and communities across the state."
  • Fundsnet Services.com provides a list of grants available to Connecticut nonprofit organization.

COMMUNICATION

  • According to a study conducted by the Network for Good, an organization based in Connecticut, "nonprofits that went from communicating with donors in just one channel to communicating in two or more ways retained a median of 12 percent more donors than they did previously."
  • Additionally, organizations that maintained different channels of communication in 2018 "had a median donation size of $302 compared with $273 for groups that communicated in a single channel."
  • The Everyday Democracy, based in Connecticut, as part of its communication strategy, partnered with the University of Arizona to drive community conversations on mental health. This program uses SAMHSA’s toolkit and engages about 26,000 young people in 300 communities with a focus on the tragic school shootings in Newtown.
Part
02
of three
Part
02

Nonprofit Space: New England

Most New England nonprofits lack proper corporate governance enforcement and gender/racial equity in their corporate structures. Nonprofit board members and leaders need honest communication about governance and succession. Both nonprofit leaders and boards need guidance in the area of fund development. These and other findings are outlined below.

CORPORATE GOVERNANCE

  • Most US states including New England areas lack corporate governance regulations as well as manpower to properly oversee nonprofit organizations.
  • In 2016, Urban Institute reported that 31% of states had less than 1 full time staff for charity enforcement activities.
  • In 2018, Urban again reported that less than 50% of US states regulated religious and political nonprofits as well as hybrid organizations.
  • Of the six New England states including Connecticut, only New Hampshire requires a minimum of 5 voting board members who are not related by blood or marriage.
  • In 2018, Seven Days reported the story of a nonprofit executive director in Vermont who controlled the organizations's finances and paid herself more than her approved salary.
  • The nonprofit board was dominated by the executive director's close associates who dismissed concerns about the organization's funds.
  • The article reports it took years for the federal government to respond to the case's red flags, which highlighted the lack of corporate governance over the state's nonprofit organizations.
  • Vermont only has one assistant AG to ensure compliance of the state's more than 6,000 nonprofit organizations.
  • Seven Days also reported that New Hampshire is one of the few states that regulate their nonprofit organizations aggressively.
  • New Hampshire's Charitable Trusts Unit head Tom Donovan said that "Unless you go public with it and report it to the police, these people will do it over and over again, because some thieves know that nonprofits are easy marks... [Nonprofit boards] don't apply the sorts of oversight that they would in a regular business."

ORGANIZATION STRUCTURE

  • Third Sector New England (TSNE) published its report "Valuing Our Nonprofit Workforce: Compensation and Benefits Survey of Nonprofits in Southern New England and Westchester County, NY" in July 2017.
  • The report surveyed nonprofit organizations in Southern New England specifically Massachusetts, Connecticut and Rhode Island.
  • According to the survey, there is a consistent gender equity gap in nonprofit structures.
  • A lack of diversity in Southern New England's nonprofit senior and mid-level leadership is also apparent.
  • The average pay for male CEOS in Southern New England nonprofits was $158,649 a year while women CEOs were only paid $119,622 a year.
  • 61% of CEOs who were surveyed were women.
  • 85% of the smallest nonprofit organizations (annual operating expenses under $250,000) employed female Executive Directors.
  • 68% of the largest nonprofit organizations (annual operating expenses over $25,000,000) employed male Executive Directors.
  • The survey also found that people of color held 44% of the lowest-paying jobs in Southern New England nonprofits.
  • TSNE's Lyn Freundlich said "Gender and racial equity are often top priorities in nonprofits especially those whose missions are focused on creating positive social change...With so many long-time, mostly white leaders, beginning to retire or leave the nonprofit sector, now is the time to create and invest in these opportunities for professional development."

COMMUNICATION

  • Nonprofit leaders surveyed by TSNE ranked communications/marketing as the 4th area where they need the most support in order to lead their organization more effectively.
  • In terms of internal communication, TSNE identified a need for honest communication between leaders and board members especially about governance and succession.
  • Mismatched expectations and perceptions can strain the relationship between nonprofit leaders and board members.
  • While boards surveyed for the report said they were mostly satisfied with their organization leaders, nonprofit executives were mostly neutral about their boards.
  • Public policy and advocacy had the biggest gap in nonprofit leader and board ratings in terms of board effectiveness (28-point-gap).
  • Supervision and guidance (22-point-gap) and fundraising (22-point-gap) also registered significant differences between nonprofit leaders and boards' ratings.
  • Nonprofit leaders planning to leave within two years cited frustration with board members as their number one reason for leaving.

FUNDRAISING

Part
03
of three
Part
03

Nonprofit Competitors in Connecticut and New England

Connecticut Food Bank, Achievement First, Hartford Foundation for Public Giving, The Multiple Myeloma Research Foundation, and National Organization for Rare Disorders are five nonprofits located in Connecticut. Good Shepherd Food Bank of Maine, Grassroot Soccer, Vermont Foodbank, All Hands and Hearts Smart Response, and Rhode Island Community Food Bank are five nonprofits in New England. All ten nonprofits are doing really well with fundraising.

Connecticut

Connecticut Food Bank

  • Connecticut Food Bank is located in Wallingford, Connecticut.
  • Connecticut Food Bank is doing really well with fundraising. They raised $42,203,150 in total contributions in 2018.
  • Their fundraising efficiency is 97% ($0.03).

Achievement First

  • Achievement First is located in New Haven, Connecticut.
  • Achievement First is doing really well with fundraising. They raised $21,871,823 in total contributions in 2018.
  • Their fundraising efficiency is 96% ($0.04).

Hartford Foundation for Public Giving

  • Hartford Foundation for Public Giving is located in Hartford, Connecticut.
  • Hartford Foundation for Public Giving is doing really well with fundraising. They raised $13,097,119 in total contributions in 2018.
  • Their fundraising efficiency is 91% ($0.09).

The Multiple Myeloma Research Foundation

  • The Multiple Myeloma Research Foundation is located in Norwalk, Connecticut.
  • The Multiple Myeloma Research Foundation is doing really well with fundraising. They raised $44,515,691 in total contributions in 2017.
  • Their fundraising efficiency is 93% ($0.07).

National Organization for Rare Disorders

  • National Organization for Rare Disorders is located in Danbury, Connecticut.
  • National Organization for Rare Disorders is doing really well with fundraising. They raised $43,026,731 in total contributions in 2018.
  • Their fundraising efficiency is 97% ($0.03).

New England

Good Shepherd Food Bank of Maine

  • Good Shepherd Food Bank of Maine is located in Auburn, Maine.
  • Good Shepherd Food Bank of Maine is doing really well with fundraising. They raised $56,568,944 in total contributions in 2018.
  • Their fundraising efficiency is 98% ($0.02).

Grassroot Soccer

  • Grassroot Soccer is located in Hanover, New Hampshire.
  • Grassroot Soccer is doing really well with fundraising. They raised $10,156,785 in total contributions in 2017.
  • Their fundraising efficiency is 93% ($0.07).

Vermont Foodbank

  • Vermont Foodbank is located in Barre, Vermont.
  • Vermont Foodbank is doing really well with fundraising. They raised $26,189,920 in total contributions in 2018.
  • Their fundraising efficiency is 95% ($0.05).

All Hands and Hearts Smart Response

  • All Hands and Hearts Smart Response is located in Mattapoisett, Massachusetts.
  • All Hands and Hearts Smart Response is doing really well with fundraising. They raised $23,501,809 in total contributions in 2018.
  • Their fundraising efficiency is >99.9% (<$0.01).

Rhode Island Community Food Bank

  • Rhode Island Community Food Bank is located in Providence, Rhode Island.
  • Rhode Island Community Food Bank is doing really well with fundraising. They raised $17,644,814 in total contributions in 2018.
  • Their fundraising efficiency is 92% ($0.08).

Research Strategy

We have provided nonprofits located in Connecticut and New England that are doing really well with fundraising using information from Charity Navigator. We selected nonprofits that raise over $10 million annually and have a fundraising efficiency of over 90%.

Charity Navigator defined the fundraising efficiency as the amount expended to raise $1 in funds. It was calculated from the last three fiscal years.

We calculated the percentage by subtracting the fundraising efficiency amount from $1 and divided the result by $1. This is then expressed as a percentage.

Calculations

Percentage fundraising efficiency:

Connecticut Food Bank: ($1 - $0.03) / $1 = 0.97 = 97%
Achievement First: ($1 - $0.04) / $1 = 0.96 = 96%
Hartford Foundation for Public Giving: ($1 - $0.09) / $1 = 0.91 = 91%
The Multiple Myeloma Research Foundation: ($1 - $0.07) / $1 = 0.93 = 93%
National Organization for Rare Disorders: ($1 - $0.03) / $1 = 0.97 = 97%
Good Shepherd Food Bank of Maine: ($1 - $0.02) / $1 = 0.98 = 98%
Grassroot Soccer: ($1 - $0.07) / $1 = 0.93 = 93%
Vermont Foodbank: ($1 - $0.05) / $1 = 0.95 = 95%
All Hands and Hearts Smart Response: ($1 - <$0.01) / $1 => 0.99 = >99%
Rhode Island Community Food Bank: ($1 - $0.08) / $1 = 0.92 = 92%


Sources
Sources

From Part 02
Quotes
  • "The survey data shows that the average compensation for female Executive Director/CEOs lags behind that of male CEOs. The average pay for all CEOs is $134,834 per year: $158,649 for men and $119,622 for women. "
  • "However, women hold most of those positions in the smallest organizations, which are also the ones that pay the lowest salaries."
  • "Eighty-five percent (85%) of the organizations with annual operating expenses under $250,000 have female Executive Directors, while 68% of the largest groups — those with annual operating expenses over $25,000,000 — employ male Directors."
  • "That means that people of color hold 11% of the highest paying jobs and 44% of the lowest."
  • "“Gender and racial equity are often top priorities in nonprofits especially those whose missions are focused on creating positive social change,” says Lyn Freundlich, TSNE MissionWorks’ Human Resources Consulting Practice Leader."
Quotes
  • "From November 2016 to February 2017, TSNE MissionWorks, in partnership with regional sponsors and supporters, reached out to nonprofits across Massachusetts, Connecticut, Rhode Island, Southeastern New York State and adjoining communities to learn about their organizations’ compensation and benefits practices."
Quotes
  • "To Trunzo, the episode illustrated a lack of government oversight of Vermont's sprawling nonprofit sector. Though the state is home to more than 6,000 federally recognized nonprofits, it employs a single assistant AG to ensure their compliance with Vermont law. "
  • "And unlike most New England states, it does not require nonprofits to file regular financial reports. The federal government does require them to file, but it lacks the resources to comb through the reports. "
  • " "If Vermont had a more stringent reporting requirement, maybe the Emerge mismanagement would never have happened," he said."
  • "Few states regulate nonprofits as aggressively as New Hampshire."
Quotes
  • "(p.3) Fewer than half the states reported regulating religious and political organizations, those conducting political activities, and hybrid or for-benefit organizations (figure 1). "
  • "(p.3) States were more likely to report regulating religious organizations (47 percent of states), hybrid organizations (41 percent), and low-profit limited liability (LC3) companies (40 percent) than regulating political activities of other nonprofits (34 percent), Benefit and B corporations (29 percent), and political organizations (13 percent)."
Quotes
  • "New Hampshire At least 5 voting members who are not of the same immediate family or related by blood or marriage (some exceptions). "
  • "Maine A president, a secretary or clerk, a treasurer and such other officers and assistant officers as may be deemed necessary"
  • "Vermont A president, a secretary, and a treasurer are required."
  • "Massachusetts A president, a treasurer, and a clerk are required."
  • "Rhode Island A president, a secretary, and a treasurer are required."
Quotes
  • "(p. 10) Fundraising creates a cycle of frustration for nonprofit leaders – and it is a challenge that undermines the relationship between leaders and their boards."
  • "Respondents to the survey identified fundraising as a recurring pain point for their organizations. A majority of board members (54%) ranked fund development as the most challenging issue facing their organization’s leader."
  • "These findings affirm that both leaders and boards need support and guidance in fund development. "
  • "Leaders struggle the most with what they say is their board’s ineffectiveness in this area and it is a key strain in the board-leader relationship. Boards, for their part, want to do more to support their organizations’ fundraising but are not quite sure how."
  • "Overall, only a slight majority of nonprofit leaders (56%) said they are satisfied or very satisfied with their board’s general performance and nearly a quarter of leaders are dissatisfied or very dissatisfied with their board."
  • "(p.11) Fundraising, governance and staff development are core areas of challenge for New England’s nonprofit leaders. "