David La Piana

On June 20th, the sixth annual Craigslist Boot Camp occurred on the campus of UC Berkeley. I gave a morning talk on Real-Time Strategic Planning and my colleague Vance Yoshida discussed “How to Build a High Impact Board.”

We also launched La Piana Consulting’s latest research initiative, Nonprofit Next, funded by the James Irvine Foundation and Fieldstone Alliance. Our staff set-up video booth stations throughout the event and collected nearly 100 testimonials from attendees on where they will take nonprofits next. We asked folks to give us their take on the state of the sector, their own innovative ideas for coping with change, and any insights they would like to share.

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The Chronicle of Philanthropy carried an article on the Beldon Fund – which had the great idea to create a foundation with the purpose of spending $100 Million in 10 years instead of growing an endowment.

This is at a time when other foundations are, almost without exception, choosing to protect their diminished endowment rather than spend it down a bit in the current crisis. Hundreds of thousands of nonprofits are in dire straits (a recent United Way of the Bay Area survey revealed that a third of respondents were unsure they would make it to the end of 2009), and the communities that depend on them are left with both fewer tax-supported services and less private charity.

Yet some foundations are more interested in preserving themselves at a reduced endowment level of say $50M instead of keeping their spending levels up through the crisis and emerging with, say, $45M. Priorities?

What are your thoughts on the Beldon Fund? Post a comment about what you think should be most important to foundations during an economic downturn.

The White House recently called for Americans to donate relief aid to Pakistan by text message. I doubt this is a first for the Obama White House, but it sure makes sense. Americans are generous to a fault, and these days, they seem to be texting like it is going out of style. So why not combine the two?

Has your organization incorporated cell phone texting as a fundraising medium? Let us know and we might feature your campaign in our latest research initiative, Nonprofit Next.

We recently concluded the launch week of Noyce Leadership Institute’s second cohort, for which I am a core faculty member, with responsibility for governance and strategy curriculum elements.

Seventeen CEOs of science centers from around the world came to Seattle for a jam-packed week of leadership development activities. Leaders from Alabama, California, Canada, Czech Republic , D.C., France, Israel, Louisiana, New York, Pennsylvania, the Philippines, South Carolina, Texas and the UK came together to form a new learning community for the next year.

At week’s end we are all both exhausted and exhilarated. NLI is sponsored by the Noyce Foundation, with additional support from public and private sources. It is a privilege to be a part of this great group’s journey.

I was recently in North Dakota, a state that, in addition to its many charms, has a small budget surplus. That’s right, a surplus.

I live in California, however, where voters recently rejected a slate of propositions that would have provided some short-term band-aids to our hemorrhaging $35 billion budget shortfall. These poorly designed and totally opaque propositions were total stumpers for most voters, myself included.

Only one passed, with about 80% of the vote. This proposition limits pay increases to our state legislators. That should solve our mess. Now we face draconian budget cuts (e.g. raising college tuitions while at the same time cutting college scholarship funding), an unraveling safety net, and on and on, and yet our legislature is totally unable to agree on any measures to address the situation.

I will make one safe prediction: the legislature will not pass a budget. As required, by June 30. The longer they take, the worse the cuts need to be.

Here is a nifty web page:

http://foundationcenter.org/focus/economy/forecast.html;jsessionid=YVBF3MJTCZEAFLAQBQ4CGW15AAAACI2F

The Foundation Center has compiled a nice listing of major foundations’ responses to the economic crisis. They use a nice symbol system so you can quickly see who has increased or decreased their giving and even who is launching a new initiative. Check it out.

This month marks a new era in our firm’s development. We have just moved into a great new space – at a recession era rent – just four blocks from our old space. We are now located at 5900 Hollis Street, Suite N, still in Emeryville, CA, 94608. We are still mostly a virtual firm, with all consultants working from home, but our office staff there now have better work space and we have more meeting space for client and staff get-togethers. Stop by if you are in the area!

We recently decided to change our name from La Piana Associates, Inc. to La Piana Consulting for a few reasons. We spend a lot of time thinking about how we can better connect with our clients and the sector. We believe having a name that actively describes what we do, that reinforces our commitment to directly advancing the leadership and management practices of the nonprofit sector, is essential.

While some companies change their names to distract the public from who they really are and what they really do – like an environmentally polluting industrial giant “greenwashing” their product name or a cigarette-manufacturer changing its name to a vaguely Latin term that conveys purity – our goal is the exact opposite. Who we are and what we do remains unchanged. We are consultants dedicated to advancing the nonprofit sector for greater social impact.

In my experience, there are nonprofit mergers but not acquisitions. Yet with the economy in a tailspin, everyone, from local law firms and CPA firms to national consultancies, is suddenly interested in nonprofit mergers, or as they uniformly, and erroneously, refer to this phenomenon: Nonprofit M&A.

Granted, there may be some appeal to this term. It is easily recognizable and being borrowed from the corporate sector, it may convey some false sense of legitimacy or soothe the nonprofit sector’s inferiority complex.

It’s been nearly 10 years since I wrote the first Nonprofit Mergers Workbook, and in working with hundreds of nonprofit organizations, we’ve found there are two key conceptual problems with the term “Nonprofit M&A.”

First, nonprofits have no “ownership,” instead, they are held in trust for the public by a volunteer board. The board is a steward, not a group of owners. This suggests you cannot buy or “acquire” a nonprofit organization. You can buy some of its assets, but not the organization itself.

Which leads to the second problem with the term: it scares the heck out of the leaders of nonprofits who might enter into merger negotiations thinking they are “acquisition targets.” We constantly reassure concerned clients that there are no “hostile takeovers” in the nonprofit sector.

We need to push forward with exploring our sector’s options for collaboration, but we should not adopt a potentially loaded corporate term that doesn’t reflect the true nature of nonprofit partnerships.

I was honored to learn recently that my latest book, The Nonprofit Strategy Revolution, published last year by Fieldstone Alliance, was one of three finalists for the 2009 Independent Book Publishers Association Benjamin Franklin Award in the category of best business book. The book has been selling briskly, and at least one major national nonprofit federation is about to adopt it as their official strategic planning methodology for all affiliates. The revolution has begun!