Charity Navigators 10 predictions for the future and what affect they might have on the arts - most importantly opening your books to the world

Ken Berger (President & CEO of Charity Navigator) posted his 10 predictions about the non-profit sector on his blog. He provides detailed thoughts behind his predictions but here they are in short:

1. Increased Funding by the Federal Government
2. Decreased Funding from Other Sources
3. Rising Demand for Charities to Provide Information on Their Impact
4. Mergers, Program Closures and Layoffs
5. Scandals As Always, Only More So
6. Charities Having Problems Filing the New IRS Form 990
7. A Greater Divide in Opinion Over the Role of Government in the Charitable Sector
8. Arts, Humanities and Cultural Charities Take A Beating
9. Health Care Charities Remain King of the Hill
10. Religious Charities Remain Strong

With the exception of number one, I pretty much agree with his predictions (I think the government will pressure social sector but not necessarily fund it).

I think there are several the arts should be paying attention to:

Number eight: Obviously. Berger points out the admissions, reliance on affluent donors, and competition from social services sector are major factors. I addressed this competition aspect late last month. I could spend all day linking to my thoughts and others that I have tied into regarding ticket prices and donor dependence, I think we are all pretty clear that we have priced ourselves into smaller audience sizes and have not found the correct balance for the majority individual organizations. This will of course lead to several more organizations joining those who have already closed.

However I think number four, five and six are very pertinent to the arts as well.

I have written a bit about resource sharing, but not enough about mergers (which my next post will examine along with the idea that is becoming more and more annoying to me "putting the regional back into regional theatre" let me post before the angry comments pour in).

But let's focus for a minute on 990s and scandals. More and more I am seeing articles of executive compensation in nonprofits being torn apart. I would actual argue that the clarity on salaries and major donor relationships will be a source for scandals - real and made up. The 990 is something many executives and board pay no attention to, I think this is a MAJOR mistake. The 990 is the most public document regarding an organization. Most are posted on the Internet in many different forms - any one can look at them, peers, donors, government officials, etc. As the form is getting easier to read and understand, more and more people will have more and more information on your organization. I urge all executives and boards to take a serious look at what their 990 says about them. In fact, I would ask someone from a "competitive" organization to tear through them with a vengeance. After all there may be some IRS agent out there who will or worse a major donor or press person who will.


990 resources -

Want to read almost any organizations 990 - www.guidestar.org you have to register but is free.

Philanthropy Journal article Get Ready for the new 990.