What would you say is the nonprofit organization’s biggest challenge? Probably not how to spend money donated to it. Yet that is the precise situation recently faced by an Israeli nonprofit.
A few weeks ago I got a call from the head of an Israeli organization that had just been given $500,000 from an American donor on two conditions: that the organization needed to accept the funds by the end of this December and that it have a plan for allocating the money. In a climate where most organizations scramble around to secure end-of-year donations it was quite a shock to my colleague to receive such a phone call.
The CEO of the nonprofit, which provides services to children at risk, asked for my guidance on how to respond to this offer. I suggested an approach that would provide the agency with an opportunity to use part of the funds on program implementation while providing some sustainability for the programs being implemented. Of course I let the CEO know that he had to present the plan to the donor and receive the donor’s agreement before accepting the contribution.
The CEO was concerned he was not in a position to use the funds immediately, and he wanted to know the most effective way to support a number of different programs during the 2014 program year. He was also not sure how to word the specific proposals for the use of the funds. He was only sure of one fact: that he needed to send something to the donor immediately so the funds would be secured and be sent to him by December 31, 2013. The donor needed the tax deduction for the current year.
As I began to meet with the CEO, it became clear that accepting this donation would not be a simple matter. First of all, he had to develop a logistical process just to accept the money. Because the nonprofit had not depended on donations from the United States, its American affiliate was not active, and the CEO was not even sure it could be used as a conduit for the funds. I suggested he investigate other possible avenues for transferring the funds. It was clear that he could not respond to the donor before he figured out how to accept the funds.
The next step was to begin discussing the nature and types of programs to be funded by the contribution. Until now the nonprofit’s services had been funded by contracts with municipalities and local councils in Israel and delivered through local departments of education and individual schools. In this way he was able to avoid high administrative costs because his only expense was the salaries of the program staff delivering the services and accountant fees to keep track of his income and expenses.
I suggested that there was a sophisticated network of child abuse prevention agencies and treatment frameworks that might be receptive to cooperating and collaborating with his organization. In the past he was not welcomed into the group of normative service providers; he thought this was because of the unique approaches he had developed both in working with parents and their children. I suggested that it would be best to “test the waters” and arrange meetings with some of his colleagues to see if they would be more receptive now to collaborating with his nonprofit. Perhaps recent developments in the field of child abuse might make them more receptive to engaging in some form of cooperation. Because he was hoping to work in locations throughout the country, this meant arranging meetings in the northern, southern, and central areas of Israel.
During our initial discussions we discussed my role and how I could be of assistance to him. I told him I would not be involved in the operations of his organization or the implementation of his programs, but that I would help him build the framework so that he could receive the funds in the next few weeks. I would be willing to work with him to restructure his Israeli nonprofit, to engage with other organizations to explore cooperative efforts, and to assist him in his search for a professional who could take over the added administrative functions, allowing him to devote his time to the development and provision of services to children and their families.
We are now several weeks into the process, and he has received the donor’s agreement to slow the pace of spending of the contribution, carrying the funds over to the next several years, if necessary. He has begun to restructure the nonprofit in Israel and has stepped down from the CEO role, having found someone to take over the administrative responsibilities. Through contacts in the United States he was able to identify an American organization involved in the provision of social services in Israel that was prepared to be the conduit for his funds using a system for ensuring sound accounting procedures and transparency.
There have been some tense moments as the former CEO made the transition from founder and CEO to more of a professional oversight role, enabling him to focus on his creative approach and techniques to dealing with child abuse in Israeli society. He is more content with this role and I am not sure he would agree with my characterization, but I would posit that he is no longer chasing windmills and he has now positioned himself to turning the wheat into flower.
The phone call from the donor was serendipitous, but it brought new life and new challenges to someone who had creative ideas but was unable to implement them fully. My colleague was able to rethink what he was doing and the way he was working to take advantage of a most unusual and generous gift. This is the kind of challenge nonprofit organizations not only welcome but dream of having.
Stephen G. Donshik, D.S.W., is a lecturer at Hebrew University’s International Nonprofit Management and Leadership Program and has a consulting firm focused on strengthening nonprofit organizations and their leadership for tomorrow. Stephen is a regular contributor to eJewish Philanthropy.