The highly acclaimed Financial and Strategic Management for Nonprofit Organizations provides an encyclopedic account of all the key financial, legal, and managerial issues facing nonprofit executives. This is today's definitive single-source text and reference for managing any nonprofit organization. Designed for both professional and graduate student readers, this work thoroughly addresses all key aspects of building managerial skill and promoting imagination and innovation in organizations across the nonprofit spectrum. Herrington J. Bryce presents every technique and concept in the context of today's public policies, leading practices, laws, norms, and expectations.

Acknowledgements | vii About the Author | ix Introduction: Teasing Your Managerial Imagination, Creativity and Resolve | 1 Part I: Why Us Chapter 1: The Foundations of Nonprofit Management as Asset Management | 9 The Hierarchy | 10 The Need for a Nonprofit Perspective | 11 The Core Tasks of Managing Nonprofit Organizations | 12 Secular Growth of the Nonprofit Sector | 13 A Varied Sector | 14 The Nonprofit as an Asset | 16 Isomorphic Forces and Organizational Identity | 19 The Mission as Contract, Source of Expectation, Confidence and Style | 20 The Public Policy Process as the Principal Action Space | 22 Organization-Specific Opportunities in the Action Space | 23 The Link: Ethics, Effectiveness and Efficiency in Performance | 24 Stewardship | 25 Keeping Track for Evaluation and Direction | 27 Cost as a Driver and as Object of Efficiency | 30 Insufficiency of Contributions | 31 Collaboration | 38 Social Entrepreneurship | 39 Disclosures as Functional Tools | 42 Disclosure as a Management Philosophy or Attitude | 43 The Role of the State | 44 Conflict of Interest and Transactions with Related Parties | 45 Nonprofits as Tax Payers and the Value of Exemption | 45 Summary and Preview | 47 Postscript to Perspectives | 48 Footnotes | 49 Chapter 2: Managing the Corporation, Its Powers, and Exemption | 51 The Nonprofit Corporation: Its Creation, Powers and Prohibitions on Management | 53 Specific Powers of the Nonprofit Corporation | 54 Specific Prohibitions | 56 How Does the Nonprofit Corporation Differ from a For-Profit Corporation | 58 Financial Advantages and Disadvantages of Exemption | 60 The Tax-Exempt Status: Its Privileges, Prohibitions, Responsibilities | 62 How is the Tax-Exempt Status Acquired First at the Federal Level | 64 How is Tax-Exempt Status Acquired on the State and Local Levels | 69 Factors That Threaten the Loss of Tax-Exempt Status Under 501(C)(3) | 74 Carrying Out a Dissolution | 81 Summary and Preview | 83 Footnotes | 83 Chapter 3: Managing the Nonprofit as a Public Corporation | 85 Forming the Publicly Supported Organization | 85 The Basic Requirements of 501(c)(3)s | 86 Privileges of Public Organizations | 86 The Public Charities: Section 509(a)(1) Organizations | 87 Proof of Public Support: 509(a)(1) | 88 Calculation of Public Financial Support: 509(a)(1) | 90 The Effect of Large Contributions on Public Support | 91 Unusually Large Gifts and Grants | 91 IRS Certification of Organization¿s Tax-Exempt Status | 92 Fee-For-Service Organizations: 509(A)(2) Organizations | 93 Diversification and Preservation of Tax-Exempt Status | 94 Comparison if 509(A)(1) and (A)(2) Organizations | 96 Category One: Subordinate Corporations | 97 Category Two: Closely Cooperating Affiliates | 99 Summary and Preview | 102 Chapter 4: Managing the Nonprofit as a Private Corporation | 103 The Private Foundation¿What It Is | 103 The 501(C)(3) That Is Not Private | 104 The Performance-Based Group | 105 The Formula-Based Group | 106 Private Nonoperating Foundations | 106 Restrictions on Expenditures, Economic Transactions, and Investment | 107 Disqualified Persons | 107 Private Operating Foundations | 113 The Income Test | 113 Asset, Endowment, and Support Tests | 114 Soliciting Private and Community Foundations | 114 Private Foundations | 115 Community Foundations | 116 The Affiliated or Supporting Organizations | 117 The Donor Advised Fund | 117 Private Foundations, Public Foundations, and Charitable Organizations In Canada | 118 Summary and Preview | 119 Chapter 5: Managing the Nonprofit as Instrument of Groups, Business, and Politics | 121 Powers of Associations | 122 Associations of Individuals | 122 Civic Leagues and Welfare Organizations | 124 Agricultural Associations | 125 Business Associations | 126 Common Interest of Business Associations | 126 Non-deductibility of Business Lobbying Expenses | 127 Examples of Missions of Business Associations | 127 PACs, SUPERPACs, and Political Organizations including Parties and Committees | 129 Federal Disclosures by Section 527 Organizations | 131 Social Clubs | 132 Fraternal Associations | 132 Cooperatives | 133 Religion | 134 Veterans | 134 Associations of Organizations | 135 Federations | 135 Affiliations | 136 Groups | 137 The Lodge System | 138 Holding Companies | 138 Common Trusts or Charitable Risk Pools | 139 Membership Powers, Duties, and Liabilities | 139 Stocks as Evidence of Membership | 140 Termination of Membership | 141 Political Involvement of Nonprofit Organizations | 141 Advantage of 501(c)(4) as a Political Vehicle | 142 State Example of Trying to Reign-in the 501(c)(4) | 142 The Feds and 501(c)(4) | 143 Citizens United v. Federal Election Commission as Decided January 21, 2010 | 144 Non-partisan civic related actions of 501(c)(3) | 147 Summary and Preview | 149 Footnotes | 149 Chapter 6: The Governing Body: Trustees and Directors | 151 Public Interest in the Boards of Nonprofits | 152 A Functioning Board I | 154 A Functioning Board II | 155 Size and Composition of the Board | 156 Independent Members of the Board | 157 Public Officials as Trustees | 158 Organization of The Board into Committees | 158 Interlocking Directorates | 160 Term of Service on The Board | 161 Qualification and Removal of Trustees | 161 Transactions and Trustees | 163 Prohibition by Trustee Classification | 164 Dealing with Possibilities of Conflicts of Interests | 165 States and Trustee Conflict of Interest | 165 A Five-Part Conflict of Interest Policy | 166 Three General Standards of Action of Trustees | 169 Emergency and Appointive Powers of Trustees | 172 Instituting Procedures for Complaints and Corruption | 173 Duty of Organizations to Trustees and Their Rights | 174 Economic Transactions and The Trustees | 175 Bankruptcy and The Trustees | 177 Limitations on Trustee Indemnification | 184 Annual Disclosures of Involvement of Current and Past Trustees and Senior Management | 185 Summary and Preview | 188 Footnotes | 188 Part II: We Need to Raise Money Chapter 7: Stimulating Gifts and Contributions: Crafting The Appeal | 191 Individual and Corporate Motives for Giving | 192 Why People Give: New Findings | 194 Why Corporations Give | 198 Why Corporations May Say No | 199 Dangers in Receiving Gifts | 202 Type of Gift and Precaution | 202 Government Promotion of Giving | 204 Payroll Deduction | 204 Tax Deduction and Credit | 204 The Importance of Tax Deductibility of Contributions | 205 Tax Deductibility: Three Cases | 206 Required Characteristics of a Tax-Deductible Gift | 207 Borrowing to Make A Donation | 216 Problems of Accepting Gifts Subject to Debt | 216 Value of Gifts of Present Interests | 218 Gifts of Stocks: Perspectives of Donor And Donee | 222 Reporting Requirements and IRS Vigilance | 225 Limits On Giving | 225 Problems and Strategies of Large Gifts | 228 Mix Strategies | 231 Soliciting Disclosure: Charitable Fundraising 501(C)(3) | 232 Summary and Preview | 233 Footnotes | 233 Chapter 8: Deferred Giving: The Risk/Reward and Virtue of Patience | 237 The Uses of Trusts: Deferred, Extended Benefits, and Cash Flow | 238 Trusts as Charitable Organizations | 239 The Law and The Management of Trust Funds | 240 The Performance of Charitable Remainder Annuity Trusts | 243 Types of Charitable Remainder Trusts | 244 Charitable Lead Trusts | 247 Examples of The Application of Trust Concepts | 249 An Advanced Application of A Remainder Unitrust | 252 An Advanced Application of a Charitable Lead Trust | 252 The Uses of Wills: Gifts Deferred Until Death | 253 Life Insurance: Magnifying The Value of Small Gifts | 257 Death and the Collection of Gift | 258 Ownership | 258 Form of Gift | 259 Types of Policies | 261 Comparing Characteristics of Contracts | 263 Role of Insurance In Fund-Raising Strategy | 264 Annuities: Providing Income Flows | 267 Steps for Determining Deferred Giving Instruments | 269 Endowments: Perpetuating a Gift | 269 The Law and The Investment of Endowment and Other Institutional Funds | 273 Four Essential Steps For An Endowment | 275 Valuation of Future Gifts | 276 Summary and Preview | 281 Footnotes | 282 Chapter 9: Entrepreneurial Revenues Generated by Mission | 283 What Is Business Income | 283 Sources of Business Income Opportunities | 284 Compatibility of Charity and Profits | 285 Now That You Know the Organization Can, Should It and How? | 294 How Will the Investment Affect the Tax-Exempt Status? | 294 How Suitable Is the Level of Entrepreneurship for This Organization? | 296 How to Acquire a Business | 298 Should the Business Be Related or Unrelated? | 299 Should the Business Be Separately Incorporated? | 299 Where Does the Money Come From To Acquire The Business? | 300 Is the Business Profitable? | 300 Is Profitability Enough? | 301 Can the Business Be Made Profitable? | 302 What Will the Investment Cost? | 304 From A Financial Perspective, Is the Investment Worth It? | 304 Do the Benefits Exceed the Costs? | 305 When Will The Organization Recapture Its Investment? | 307 What Are the Risks? | 307 What Will It Take to Break Even? | 308 What Can Be Done with The Earnings of The Business? | 309 How Will Entry into the Business Be Made? | 309 Is the Business Understood and Reflected in A Viable Plan Including When to Exit, Shift Gears, and How to Operate? | 310 Is A Collaboration Appropriate for This Venture or Organization? | 311 Is There Competition? Is It Fair? | 311 What Do the Trustees Think of the Plan? | 312 Ethical Dilemma of Business Competition | 313 Summary and Preview | 314 Footnotes | 315 Chapter 10: Entrepreneurial Revenues Unrelated to Mission | 317 Definition of Related and Unrelated Nonprofit Businesses | 319 Excess Profits: A Distinction Between Related and Unrelated Income | 322 Integration of Business Operations into A Conglomerate Structure | 322 The Organization of an Unrelated Business | 325 Benefits, Consequences, and Opportunities of Unrelated Businesses | 326 Consequences of Unrelated Businesses | 327 Benign Origins of Unrelated Businesses | 328 Unrelated Business for Cost-Sharing Purposes | 329 Tax Treatment of Different Types of Business Income | 329 Sources of Unrelated Business Income: A Simplified View | 343 Ten Questions to Judge Whether Business Will Be Unrelated | 344 The Federal Tax | 344 Other Costs of Unrelated Business Income | 347 Key Points on Entrepreneurial Income in Nonprofits | 347 Summary and Preview | 348 Part III: Marketing the Good and Bad News: Convincing Chapter 11: Marketing and Solicitation Guidance | 351 Solicitation | 351 The Solicitors for Charitable Purposes (Fundraisers) | 352 Federal Solicitation Rules for Charitable Purposes | 355 The Choice of Fundraising Contractor | 355 Non-Charitable Solicitation | 358 Commercial Marketing | 360 Choosing an Object of Marketing | 365 Choosing A Target | 366 Targeting by Income Levels | 367 Specific Risk Exposures of Nonprofits In Commercial Marketing | 369 The Importance of A Trustee Policy | 370 Charitable Solicitation: Massachusetts And Others | 371 Summary and Preview | 374 Footnotes | 375 Chapter 12: Restoring Trust: A Use of Relationship Marketing | 377 First, What Is Trust? | 377 Contracting | 378 The Distinction between Unrestricted and Restricted Donations as Trust Transactions | 380 A Conundrum and Constraints On Restoring The Public Trust | 385 A Guide to Managing The Public Trust | 388 Summary | 390 Footnotes | 390 Part IV: The Inescapable Risks and Costs Chapter 13: Corruption | 395 Types and Effects of Corruption in Nonprofit Organizations | 395 Sources and Opportunities for Corruption | 398 Managing the Risks of Corruption and Fraud | 399 Controls: A Transaction Approach | 400 Intelligence: Information and The Protection of Sources and Records | 403 The Internal Audit and Required Disclosures | 404 Summary and Review | 406 Footnotes | 406 Chapter 14: Negligence, Discrimination, Harassment and Abuse | 409 The Basics of Risk Management | 409 A Simplified Approach to Risk Identification and Intervention | 410 Types of Risks | 412 Protecting Against Liability of Independent Contractors | 414 Coverage: Shields Can Be Penetrated | 420 Discrimination Against the Disabled | 430 Summary and Preview | 433 Chapter 15: Compensation and Employee Benefits | 435 Excess Executive Compensation | 435 Key Employees and Reasonable Compensation | 437 Accidental Death and Dismemberment | 446 The Affordable Care Act and Nonprofits | 447 The Traditional Medical and Hospitalization Insurance Plans | 448 Health Maintenance Organizations | 451 COBRA | 453 Pensions | 453 Rabbi Trust | 460 SIMPLE Ira or 401(K) | 460 Cafeteria Plans | 464 Profit-Sharing Plan | 464 Fringe Benefits | 465 Discrimination in Medical Benefits | 470 To Discriminate or Not | 471 Ten Steps to Setting Up the Benefit Package | 472 Independent Contractors and Social Security | 472 Summary and Preview | 474 Chapter 16: Budgets: Controlling Costs and Sending a Message | 475 The Budget as A Management Tool | 475 The Budget as A Sum Of Parts | 476 The Budget as Contemporary History | 477 Capital and Operating Budgets | 478 Budgets as Baseline | 478 Budgets as Fiction | 478 Principles Underlying Budgets | 479 Zero-Based Budgeting and PPBS | 479 Efficiency: Costs and Support | 480 The Importance of Distinguishing Between Cash (Expenditures) and Costs In Budgeting | 480 Classification and Treatment of Costs in Budgeting | 481 Unallowable Indirect Costs | 486 Capital, Operating, and Replacement Costs and Expenses | 491 Costs and Responsibility Centers | 493 Ten Steps to Cost Budgeting | 495 How to Estimate Costs Simply | 499 Key to Controlling Costs | 499 Leasing as A Fixed-Cost Strategy | 500 Outsourcing as A Cost Strategy | 501 Support and Revenues | 502 Allocating Dollars Across Programs | 503 Permanent Revenues and Fixed Costs | 505 Forecasting | 506 Illustration: Costs and Revenues and Their Relationship to the Budget | 507 Budgeting by Scenario | 510 Discretionary Forecasting and Budgeting | 512 Budget Formats: Form Follows Function | 512 Combinations of Program and Item Budgets | 512 Variances | 515 A Recommended Format for Using the Budget As a Control Tool | 518 A Budget Format for The Board | 521 Summary and Preview | 523 Part V: Financial Performance Future and Prolog Chapter 17: The Financial Performance and the Strength to Continue | 527 Financial Statements as An Aid to Management | 527 The Balance Sheet or Statement of Financial Position | 528 Accounting for Financial Assets and Liabilities on the Balance Sheet | 534 Statement of Support, Revenues, and Expenses or Statement of Activities | 535 Comparative Statement of Activities | 538 Statement of Changes In Financial Position | 539 Statement of Cash Flow | 543 Funds: A Managerial Accounting Perspective | 545 Illustration of Managerial Use of Financial Statements | 553 How Much Do Financial Statements Tell? | 566 Summary and Preview | 567 Chapter 18: Evaluating Old Targets and Setting New Ones | 569 Questions for Evaluating Old Targets | 570 Risks Inherent in Target Setting and in Target Achievement | 572 The Treasurer¿s Report as A Source of Intelligence for Setting Financial Targets | 574 Cash Management and Investment Strategies: Increasing Cash | 576 Borrowing as A Source of Cash | 578 Short-Term Borrowing | 579 Uses of Cash | 584 Summary and Preview | 612 Part VI: Steady Growth Chapter 19: Growth: The Search for Opportunities and Alliances | 615 Issues to Guide Growth Considerations | 615 Collaboration | 622 Summary and Preview | 638 Footnotes | 638 Chapter 20: Organic Growth by Program Expansion | 639 Strategic Stations for Program Choice | 639 Strategic Options: Profits Versus Mission | 644 Summary And Review | 668 Chapter 21: Growth by Accretive Action and Dissolution | 669 The Importance of Structure | 669 A Holding Company and Its System | 670 Principles behind Corporate Organizations | 671 Pitfalls of Reorganizing a Nonprofit in any Way | 673 Antitrust | 673 States in Reorganizations | 674 Types of Reorganization | 680 Summary and Conclusion | 692 Appendix A | 695 Appendix B: National Taxonomy of Tax-Exempt Entities ¿Core Codes | 697 Appendix C: Mathematics of Lobbying Expenditures | 707 Lobbying expenditures limits | 707 Appendix D: Sample Conflicts of Interest Policy (Revised 5/22/97) | 709 Article I: Purpose | 709 Article II: Definitions | 709 Article III: Procedures | 710 Article IV: Records Of Proceedings | 711 Article V: Compensation Committees | 711 Article VI: Annual Statements | 711 Article VII: Periodic Reviews | 712 Article VIII: Use of Outside Experts | 712 Appendix E: New York State | 713 Conflict of Interest Policy: Minimum Statutory Requirements | 714 Appendix F: Breakeven Point | 719 Appendix G: Key Concepts in Federal Contracting and Glossary of Common Financial Terms Found in Such Contracts | 721 Key Concepts in Federal Contract Management | 721 Appendix H: Risks of Cost Denial | 729 Index | 732