J IM ABBOTECONOMICS 370

PROF. DAVID WILLIAMSAGNES SCOTT COLLEGE

SEPTEMBER 27 , 2016

Nonprofit Organizations:Thinking & Acting With An Entrepreneurial Mindset

What is a nonprofit organization?

Reinvests profit or net income, rather than distributing it to members, directors, or officers.

Exempt from taxation if it benefits the broad public interest (= charitable 501(c)(3) organization)

Donors to 501(c)(3) allowed to deduct their contributions when calculating taxes

Legally, two types of 501(c)(3): public charity (multiple sources of revenue, has program services) versus private foundation (one donor, make grants to other orgs and individuals)

All nonprofits: Agnes Scott College, High Museum, Zoo Atlanta, Atlanta Symphony, Emory Healthcare, American Red Cross, CARE International, Georgia Aquarium, Coca Cola Foundation, Woodruff Foundations

Also: Party With A Purpose, Atlanta Santa Run, Metro Atlanta Beekeepers, Male Action Coalition, Humanitys Advancement Toward Saving Our Fumdamental Future [sic]

For Profit vs. Nonprofit

For Profit NonprofitOwned by someone (an entrepreneur or stockholders)

Not owned by anyone

Chief goal is generating profit Chief goal is fulfilling mission to benefit the general public

Competes with other businesses Often collaborates with other orgsCan raise capital to invest in growth, in exchange for ownership stake

Donors and creditors, not investors, are sources of funds needed for growth

Revenue from sale of goods and/or services

Revenue comes chiefly from charitable donations

(Privately held) companies can operate largely outside of public view

Law requires nonprofits to operate with high degree of transparency

Volunteerism no part of this model Nonprofits often rely heavily on volunteers

By Category of Service to the Public

Quick Stats on Nonprofits in U.S.

1,097,689 public charities105,030 private foundations

9.2% of all wages and salaries paid (2010)5.3% share of GDP (2014)

$1.74 trillion revenues by public charities (2013) $1.63 trillion expenses by public charities (2013)

Growth in Nonprofit Sector

Breakdown by Size

Total Economic Impact of Arts Orgs in U.S.

Georgia’s Nonprofit Sector: Employment

Georgia’s Nonprofit Sector: Compensation

Nonprofit Volunteering in Georgia

Critical Needs in Our Communities

Challenges, Challenges, Challenges

Challenges, Challenges, Challenges

My Three Organizations

Missions of My Three

Trees Atlanta: To protect and improve Atlanta's urban forest by planting, conserving, and educating. 

Ogeechee Riverkeeper: To protect the Ogeechee, Canoochee, and coastal rivers.

Atlanta Boy Choir: To achieve the highest possible standard of musical excellence, while instilling in its members a life-long appreciation of music; an abiding love of beauty; a keen sense of respect for themselves and others; and the self-discipline necessary to become effective leaders in their families, their communities, and the world.

Sizes of My Three (Operating Expenses in 2014)

Trees Atlanta: $2,092,147

Ogeechee Riverkeeper: $172,542

Atlanta Boy Choir: $360,836

Trees Atlanta: Outcomes in 2015

Trees Atlanta: Outcomes in 2015

Trees Atlanta: Outcomes in 2015

Ogeechee River Fish Kill

Ogeechee Riverkeeper sued a textile mill in 2012 for violations of the Clean Water Act believed by some to have been the cause a massive fish kill in May 2011. After a lengthy legal battle, the lawsuit was settled in January 2014.  The settlement agreement puts in place comprehensive and stringent environmental protections and establishes programs to aid in restoration efforts along the river. 

Value in the Nonprofit Sector

“[W]e learned that becoming a high-impact nonprofit is not just about building a great organization and then expanding it to reach more people. Rather, high-impact nonprofits work with and through organizations and individuals outside themselves to create more impact than they ever could have achieved alone. They build social movements and fields; they transform business, government, other nonprofits, and individuals; and they change the world around them.”

Heather McLeod Grant & Leslie R. Crutchfield, “Creating High Impact Nonprofits,” Stanford Social Innovation Review (Fall 2007)

Value in the Nonprofit Sector

Serve and advocate for legal and policy changes, because they realize that they cannot achieve large-scale social change through service delivery alone.

Make markets work, by finding ways to work with businesses and help them “do good while doing well.”

Inspire evangelists, by building strong communities of supporters who help them achieve their larger goals.

Nurture nonprofit networks, by sharing wealth, expertise, talent, and power with other nonprofits with similar missions.

Master the art of adaptation, by modifying their tactics as needed to increase their success.

Share leadership, by distributing it within their organizations and throughout their external nonprofit networks, thereby empowering others to lead.

Factors Affecting Nonprofits

NPO

Clients’ Needs

Donors’ Demands

Social & Political Trends

TechLaws &

Regs

Other NPOs

Brand/Reputatio

n

My story

“Inspiring Evangelists”

First TA Project 1998

Inman Park Tree

Watch 2000

Friends of the

Ogeechee 2001

Ogeechee Riverkeeper (ORK)

2004

FYS: Trees and

Forests 2006

Inman Park

Arboretum 2007

ORK fights new

power plant on

Ogeechee 2008-2010

FYS: Trees and

Forests 2010

Fish Kill on the

Ogeechee 2011

Agnes Scott

Arboretum 2012

GUFC College Canopy

Conference 2015 &

2016

Effects and Second-Order Effects

Inman Park Tree Watch

1000 new neighborhood

trees since 2000

Georgia Power tree trimmer: “I’m never coming back

here!”

First Year Seminar

30 women more closely attuned to

natural world

Alumna who is now project

manager at the Emerald Corridor

Foundation

ORK Opposition

to Coal-Fired Power Plant

Corporation abandons plans to

build plant

Child thrives in Head Start,

without cognitive impairment from fetal exposure to methylmercury

Case Study for Discussion

Should (some) drug companies be nonprofit?

DO YOU HAVE A NONPROFIT STORY TO SHARE? WHAT DO YOU

THINK WOULD MAKE THAT ORGANIZATION MORE VALUABLE

TO THE COMMUNITY?

What about you?