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This page contains a single entry from the blog posted on November 7, 2011 8:39 AM. The previous post in this blog was The Hermanator experience. The next post in this blog is A great Portland tradition: the sidewalk double-cross. Many more can be found on the main index page or by looking through the archives.

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Monday, November 7, 2011

More on those latte loans

We wrote last week about a curious pitch for donations -- from Starbucks, of all places -- to something called the Opportunity Finance Network (and don't forget the ®). That organization presents itself as "national network of community development financial institutions (CDFIs) investing in opportunities that benefit low-income, low-wealth, and other disadvantaged communities across America." To us, it sounded like asking average Joes to donate money to banks, which is the height of absurdity.

We've been digging a little deeper, and discover that OFN is a Philadelphia-based tax-exempt membership organization of CDFIs. Its president, Mark Pinsky, is paid about $225,000 a year, plus benefits worth about $17,000. It's got five vice presidents each making about $125,000 a year. It also paid an outside financial consultant another $150,000 in the year 2010.

OFN's membership includes two organizations operating in Oregon: CASA of Oregon, based in Sherwood; and Enterprise Cascadia, based in Ilwaco, Washington (just across from Astoria). Enterprise, whose real name is Shorebank Enterprise Group Pacific, recently received $231,000 from the Starbucks seed fund. Both are section 501(c)(3) organizations, with CASA of Oregon's mission being to help farm workers and Enterprise Cascadia's being to promote "environmentally restorative" businesses, especially in coastal areas. They both make loans to help their constituencies. From their financial statements (here and here), they both seem to be lean organizations -- far more so than OFN.

From our perspective, if one wanted to chip in a few bucks to promote the making of loans to worthy small businesses, it would probably make more sense to send the donation straight to CASA of Oregon or Enterprise Cascadia, rather than funnel it through Starbucks and OFN. Although the latter may be a nonprofit organization, it has lots of overhead that the local outfits don't. Eliminate the middle man, buy locally -- pick your cliché.

Comments (9)

In order to give to charities one has to do some real research, IMO.
Just like most things in this life giving takes time, energy, knowledge, and hard work to achieve success.
Do the homework!

Having an account at guidestar.org is invaluable in that regard.

I'm confused. I though CASA was a nonprofit that provides advocates for children in foster care?

Guidestar is my first resource. They are excellent.

nonprofit that provides advocates for children in foster care?

Different CASA.

The objective of the 501 (3c) Federal tax deduction is to assist in the ability of charitable institutions to do good works. I always cringe when I see Directors of non-profits paying themselves large salaries. I would like to see the IRS institute limits on renumeration based on the volume and percentage of donations that are actually delivered to the clients of the non-profits. If the non-profit doesnt meet a minimum percentage of its receipts actually going to the clients then the Directors should not receive a salary at all. Perhaps maximum salaries could be established based on the scale of the operation and the percent effiency. The point is, neither the individuals or the organization operating as a non-profit should show profits beyond the bare minimum to get the job done. This could make a great debate!

I have worked in nonprofits my entire adult life. Most nonprofits do not give money directly to clients. Most provide services, via staff, to clients. And everyone working for that nonprofit is, in some way, contributing to that effort. Even the people in administration who have no contact with the clients - because you can't run a nonprofit without fiscal, development, and other departments.

Most salaries are scaled down from what the boss makes...just about anywhere - for- and non-profit alike. But in most nonprofits there isn't a lot of $$ for extra staff and most Executive Directors work hard and very long hours and give up a lot of personal time when it comes to their agencies. Smart people who have years of experience in the field and advanced degrees expect a certain amount of renumeration for that. If you cap salaries you will see a distinct lack of talent at the head of nonprofits or you will only find rich people taking those jobs.

I buy my own pens and other things to make my work life more liveable and make way less than most folks my age with my education. My choice, yes it is, but being told that an executive director has to max out their salary or that the IRS should institute limits is just seriously insulting.

Those of us who dedicate their professional life to trying to make things better did not take a vow of poverty or some 'nonprofit oath' and we generally do not enjoy how low our salaries are. We just enjoy what we do and like that we make our living by some other means than making someone else rich. If you spent a week with some of our local mid-sized agency executive directors, I'd be willing to bet that you'd agree that 6 figures is not at all extravagant. They are the equivalent of a CEO...in fact, ours is a CEO.

But OK, how about we start with the faith-based organizations - especially those that are nonsecular? Let's limit their tax-exempt status based on the separation of church and state. Why should my tax dollars subsidize the building of a church and why should a wealthy religious entity not have to pay taxes at all when most of what they do is self-serving for them and their flock?

I agree that people should give directly to the nonprofit they want to support rather than the larger conduit organizations. But, I also understand why these organizations exist. Essentially that is what United Way is. I'm guessing their compensation is probably similar.

I run a small nonprofit and I don't have the staff or time to do the type of fundraising I need to do. I've thought long and hard about whether I should hire someone, but then I'd need to make sure I raised enough money to cover their salary and healthcare coverage, and then I'd want them to bring in more than they cost.

Membership in an organization like OFN might be the best way for me to get donations. We haven't done it yet, but it might be in our future.

We pulled out of United Way long ago. We can figure out where we want our charitable donations to go without paying middlemen (and middlewomen).




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