Standing Beside Alaska's Non-Profits

The Foraker Group Blog

Earlier this week the Trump Administration released a proposed budget for fiscal year 2018. The proposal is a vision document and is not expected to pass Congress in its current form. The House and Senate budget committees will release their own proposals next month. The National Council of Nonprofits has looked closely at how the cuts affect the nonprofit sector. You’ll find their analysis here. We urge Alaska nonprofits to review this analysis and then contact our congressional delegation to share your thoughts on the suggested cuts.

One of our public policy priorities for the past two years has been to bring much-needed change to the state’s single audit regulations. Foraker staff and the public policy committee have devoted significant time to this effort. And that work has paid off.

While we did not see all the adjustments we felt were needed, the state did make changes that will help save time and money for many Alaska nonprofits.

By way of background – Alaska nonprofits that receive at least $500,000 in grant funds from the state in a fiscal year are required to file a State Single Audit. In comments submitted to the state earlier this year, Foraker said that the $500,000 threshold was onerous and diverted resources from critical nonprofit missions. We urged the state to raise the threshold to at least $750,000 to match the requirement for federal audits. At the same time, we called for increases to the thresholds the state uses to classify a “major program,” as well as for a move to a more risk-based system overall.

We are pleased that the state has accepted a portion of our recommendations. The state single audit threshold was increased from $500,000 to $750,000 for grantees whose fiscal year began on or after April 1, 2017. However, that increase was not tied to the federal threshold requirement.

The state also made some small changes to the “major programs” thresholds. Those are:

  • If the total adjusted expenditures for all state financial assistance is less than $1 million, the major program threshold moves from $50,000 to $75,000.
  • If the assistance is between $1 million and $5 million, the threshold moves from $75,000 to $150,000.
  • If the assistance is between $5 million and $20 million, the threshold moves from $100,000 to $200,000.
  • If the assistance is greater than $20 million, the threshold moves from $300,000 to $500,000.

Remember that the major audit threshold is what determines whether a program is “major” and, therefore, requires a single state audit.

We thank Sheldon Fisher, Commissioner of the Department of Administration, and the Division of Finance for their work with us on these changes.

We urge you to check with your granting agency to determine if these changes apply to your organization. If you have questions, you can also get in touch with Mike Walsh, Vice President and Director of Public Policy, at 907.388.5561 or

Catalyst for Nonprofit Excellence is a results-oriented, tool-based program designed to increase your leadership skills. The program is open to senior leadership staff and board members committed to the nonprofit sector who are looking to be more effective in achieving goals and creating a more fulfilling, engaged work life. In this program you will:

  • Discover your unique strengths as a leader and how to apply them more fully for better results
  • Build a strong support network that helps you achieve your goals
  • Transform workplace disputes and conflicts into opportunities for deeper understanding and positive change
  • Become more effective in work and personal relations than ever before

More information on the program can be found here. The deadline for applications is June 16, 2017.


To everything there is a season and, yes, there are budget seasons. We are in one now – for federal and state governments, and for your nonprofit. If you have a fiscal year that begins in July, you are very likely drafting a budget for the next year. (For those of you with a January or October fiscal year, your season has past, and you are well on your way to living your budget.)

Budgets come in all sizes and all complexities. They can be simple and straightforward, as well as incredibly detailed and nuanced. They can be about millions of dollars or about thousands. All of our organizations benefit from this financial roadmap, and yet in Alaska we know from our recent survey work that too many organizations (19%) are operating without a budget. This seems counterproductive at best. So today, I am asking every organization to consider this tool in your toolbox.

Budgets are certainly made of numbers, but they are far more than that. Budgets tell a story of your organization. They tell us about your vision for growth and your fears and insecurities about the future. They tell you what your organizational house looks like and if you are solid and resilient, living on the edge, or partnering for strength. They tell you who you partner with and what drives your economic engine. Importantly, they also reflect your organizational values and moral compass.

Don’t just take my word for it. Spend some time looking at the story of your own numbers. What do you see? For those of you whose eyes glaze over when budgets are put in front of you, here are some questions you might ask to form your narrative:

  1. Can I see the core values of my organization reflected in the budget? Where? How?
  2. Can I see how we have funded the goals in our strategic or annual plan to ensure they will happen?
  3. Can I see how the budget reflects equity for the people who will be affected by it? For example, does it show that the organization is committed to a living wage for employees?
  4. Can I see how I am not just setting the organization up for success this year but for future success? In other words, if I can build it, buy it, or fix it today, how will I sustain it tomorrow?
  5. This is perhaps my favorite question. Can I see what difference the money will make? More than money, can I see and measure mission success?

None of these questions are easy. We don’t have to look too far to know that budgeting can be heated, difficult, and complicated. It can also be innovative, inspiring, and provide clear direction. In the midst of all of these competing experiences, the budget is a document that expresses the values and goals of the mission, and we are the stewards. Don’t miss the opportunity to see the story not just the numbers. How are you as a board and staff addressing these questions in your own budget?

Below are 11 steps to ensure that your budget is not just a collection of numbers, but a process and a product that is grounded in your mission.

  1. Gather the team
  2. Tell the truth based on data
  3. Set your goals based on your strategic and annual plans
  4. Plan for innovation and adaptation
  5. Look to the future (reserves, deferred maintenance, capital, etc.)
  6. Set your numbers
  7. Connect to your values as a litmus test for the numbers – adjust as necessary
  8. Engage the board in critical conversations on the numbers – why they matter and what they are rather than just the numbers
  9. Approve
  10. Monitor
  11. Engage the board monthly or quarterly in reviewing the budget and its implementation, both through the finance committee and the full board

Many of these steps are straightforward but a few deserve some exploration.

Gather the team. How are you ensuring your budgeting process is working to get the results that are best for your mission? Does it start with staff, then move to the board finance committee, and then to the full board for approval? If you don’t have staff, does it move from the full board, and then to the committee and back again? While the final result is important, the process for getting there is critical. No single right way exists to do this work, but there are certainly better practices than others.

One of the critical pieces to a better practice is an active finance committee. Unfortunately, we have noticed at Foraker that every organization that has closed its doors or faced financial crisis over the last decade had one thing in common – no finance committee. No group was in place to provide an appropriate amount of checks and balances to the board and staff. There was no sounding board. There was no safe place to have difficult conversations. Finance committees when constructed well, with a few board members, a trusted and knowledgeable non-board member or two, and the CEO and CFO or equivalent can be one of your best assets. The whole board is financially responsible for the present state of the organization and a steward of the future of its assets, but the committee provides the space to learn, to test assumptions, and to create scenarios for potential opportunity and crisis. They are the voice to the full board and a sounding board for staff leadership. If I sound like this committee has magical powers, than I am getting close to describing the gifts of a good finance committee. Some of you only know this committee as a mythical creature, but I promise that you can all make it real with just a bit of effort that includes strategic recruitment, a clear job description and some helpful training.

If you have a finance committee that is high performing – that’s great. If not, that is your first step. Step two is outlining how the rest of your team will be involved in drafting, reviewing, and approving the budget. Step three is engaging all the people who get to live the budget throughout the year. Again, for some of you I just described a process that involves six people, and for others it is a much larger endeavor. Whatever the size and scope, the important part is that a clear journey is outlined for the team to follow.

Tell the truth based on data. Drafting the budget is not just about who does it – it is also about what goes in it. If the budget is the financial representation of what the organization wants/needs for mission to thrive, then a lot of truth telling must go into this process. For example, we have seen plenty of budgets that are not grounded in their own facts about fundraising goals. These are organizations who typically create a budget and let the fundraising line in the budget “make up the difference” to get them to a balanced budget. This is typically a recipe for failure for most groups since they clearly did not base their numbers on the data from the prior year, nor on a plan to increase their capacity to meet the new goals. Certainly exceptions exist to this scenario but they are rare in our experience. The best predictor of the future budget is the past. Bring your comparisons of budget to actuals to the meetings. Engage in the difficult conversations about what is possible given your capacity. A budget strategy is not made up of wishes and hopes.

Plan for innovation and adaptation. This is likely a new step for many organizations, but just like any business that wants to move ahead – and in our case best serve the community – we need to think differently about how we do things. Perhaps your innovation fund will be used for some small experiments in service delivery, or for some deeper collaboration. Regardless, it takes financial investment, and it takes board and staff buy-in. Including this item in your budget indicates that you are having conversations about what it means for you, and why it is important. If you are just starting, I would suggest setting a modest dollar goal compared to your overall budget. Some organizations get their start by allocating 1% of the budget to this category. The goal is not to spend it right away, but to have a process for using it when you can best produce results for your community.

Engage your board in monitoring. Unfortunately, many board members do not understand how to read a nonprofit financial statement. Equally unfortunate is that most will not admit it. For this reason, and for the understanding that the board is ultimately financially responsible for the organization, we strongly recommend that board financial statements are simple, high-level, and come with visuals and narratives, not just numbers. More and more, I have been recommending to nonprofits both large and small some version of red light, green light visuals. You remember this game. Red light means stop. In this case something is terribly wrong that needs immediate board and staff attention. Yellow light means we need to closely watch a trend line or a particular funding source. Green light is a moment to breathe or perhaps even celebrate. Having one page accompany your balance sheet, cash flow statement, and budget-to-actual document that shows the red, yellow, and/or green lights can ensure that everyone is involved in the discussion and more accurately fulfill their responsibilities as board members.

If these ideas are new to you, or you have questions about the other steps, contact us. We are more than happy to help you fully implement this critically important tool in your toolbox. While the state and the country grapple with their budgets, I have faith that you, too, are working on this process and are coming to the answers that best meet the mission and communities you serve. To each of you, I wish a happy budget season.

Recently we conducted a survey of the mood of the Alaska nonprofit sector. We wanted to measure what we had been hearing anecdotally. The mood survey is complete and we received a representative sample from organizations across the state and sector. What we learned didn’t surprise us – you are anxious. The more revealing answers lie in the details. Overall, board members have more anxiety than CEOs. This is interesting on several fronts: 1) There are more board members than CEOs so the anxiety has a multiplying effect. 2) Board members typically represent other sectors of our economy so they have a different perspective of how the economy is affecting the work. 3) CEOs are particularly adept at dealing with challenges and difficult situations – it almost comes with the job description, so perhaps while things are generally bad, it is relative. 4) Finally, it is important for CEOs to know the board’s overall demeanor as it will have an impact on how information is shared and how decisions get made.

So what are you anxious about? First, you are concerned about the Alaska economy and the lack of a fiscal plan. More than federal issues or politics, more than mission-specific issues, you are concerned about our economy. While this is not a surprising result, it shows how deeply the nonprofit sector is intricately woven into our Alaska economic landscape. We are partners with state government and we work best when we remember that. Yes, you have mission specific issues you are concerned about and, yes, you are concerned about healthcare and, yes, there are national issues that cause anxiety – but we live in Alaska and we serve Alaskans and that is where we are focused.

When we asked you about funding, the most dynamic area was individual philanthropy. Your earned income was up, your government money was down, and individual philanthropy was better or worse depending on your organizational strategies. It seems easy to jump to the conclusion that philanthropy should go down in a slow economy. But in many cases we are watching individual philanthropy grow as Alaskans invest in the missions and causes that matter to them.

So what do you want? You want what every other industry in Alaska wants. You want stability and predictability. If the news is bad, you want to know so you can plan and not just react. This is the message that we took to the House Finance Committee earlier this month – the nonprofit sector is a strong part of the economy and as their partner we want to be at the table in finding solutions. We also pointed out that the needs don’t stop when our services are cut from the budget – they only grow and get more expensive. We are doing the work. We are anxious about the future. And we are ready to do our part so that Alaska is well served.

So what now? Of course, the tempting thing to do with a survey is to say “that’s nice” and keep moving without a second thought. Instead, I encourage you to take the data and turn it into your own action. Here are a few ideas:

  1. Put the topic on your board and staff agendas. Find out from your own team how everyone is feeling. Learn how this is affecting your decisions.
  2. Ask the team how you can begin to plan and not just react to the economic conditions we face. Are you ready to do some financial and/or program scenario planning?
  3. Call or visit with your legislator. Let them know exactly how the state fiscal crisis is affecting your work and where you see opportunities for creative thinking and solutions. Come to the table ready to offer ideas.
  4. Ensure you have a solid fund development plan that is focused on donors and is attuned to the economy. Special event fundraising was never a very good idea for raising money and in a challenging economy it can be even worse.
  5. Many of you reported changes in staffing because the government has shifted the responsibility for services to the sector even more. Understand how you will financially manage this shift in a way that maintains your values and commitment to your employees to pay them a living wage.
  6. Review your annual plans and long-term strategic plans to ensure you are ready to meet the challenges ahead.
  7. Never let a crisis go to waste. If you see opportunities to collaborate with others to identify regulations and red tape that is hindering your ability to serve the community, or that you could save your organization and the state money while ensuring a high level of accountability, transparency, and ethics, then band together and work for change.
  8. Take the first steps or next steps in building trust with partners to radically change the conditions of those you serve or the environment in which you operate. Partnerships are slow and take trust. Start today.
  9. Get support. Nothing creates more anxiety than feeling like you are all alone. Find a peer group, a social group, a network. Take a class, go to a professional gathering, phone a friend, and call us. We are ready to support you and your work.

These are just a few ideas. If you want help navigating any of them or want some additional action steps. Let us know.

On Thursday President Trump signed an executive order that could have a significant impact on the charitable nonprofit sector. Although the law has not changed and the executive order is somewhat confusing, it essentially instructs the IRS to look the other way when it finds that a nonprofit or religious organization violates the Johnson Amendment. This provision in the tax code, named after President Lyndon Johnson, is intended to keep politics and the money that flows to political candidates out of charitable nonprofits. Recently the Foraker Governance Board issued a statement calling for support for nonprofit partisanship, and we stand with over 4,500 nonprofits across the country who submitted a similar call through a letter to Congress.

We feel strongly that any attempt to repeal the Johnson Amendment is completely unnecessary. Nonprofits and their individual staff, board members, and volunteers already have many legal avenues to freely express their views on a wide range of policy issues. And as individual Americans they are still afforded the right to free speech. Changes to the Johnson Amendment will only harm religious freedom and free speech – values that are fundamental to our nation and our people.

This executive order may give nonprofits and religious organizations the sense that they are now free to engage in political activities. An executive order does not change law – and the Johnson Amendment is the law. We encourage all Alaska nonprofits, including religious organizations, to stay the course and avoid the type of political activity that is prohibited by law.

Foraker continues to stand against the erosion of the sector by allowing political endorsements and campaign spending by nonprofits. We expect a legal challenge to this executive order, along with more debate in Congress. We strongly encourage all nonprofits to continue to practice accountability and ethics by staying true to your core values and focusing on your mission.

We will continue to monitor this critical issue for our sector and to advocate to our congressional delegation about the harm to missions and organizations that will result from weakening the Johnson Amendment.

Join us and raise your voice. Stay involved. Stay informed. Be clear on the facts. Stand up for nonprofit nonpartisanship.

To read more about our position click here.

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Information on program dates and a curriculum overview can be found here. The deadline for applications is June 2, 2017.

In our public policy alert issued earlier today, we encouraged nonprofit leaders to contact their legislators. One of the opportunities we shared was public testimony on HB115. Those times have now changed – the only time to comment on the bill will be tonight from 5:00 – 6:30 pm.

Here are the instructions for testifying:

  • You must sign in to testify by 6:30 p.m. testimony limited to 2 minutes.
  • You can testify in person, at a Legislative Information Office, over the phone, or via email.
  • To testify via telephone outside of an LIO, it must be arranged through the chair’s office prior to the hearing by calling 907-465-4968.
  • You can also testify by email to:

You can learn more about the current HB115 here.

Today The Foraker Governance Board issued the following statement to the Alaska legislature on the importance of a comprehensive fiscal plan that includes a progressive revenue measure.

The Foraker Group, as Alaska’s State Nonprofit Association, has strongly and consistently stated, through its 2015, 2016, and 2017 Public Policy Priorities, and through our advocacy and outreach activities with members of the state legislature, that passage of a comprehensive fiscal plan is essential, and that an income tax must be part of such a package. We urge the state legislature to work diligently now to pass an income tax that is part of a comprehensive long-term fiscal plan that promotes strong rural and urban communities, and protects Alaska’s most vulnerable populations, education, and cultural life.  As individual board members we are prepared to share a tax burden that is based on fairness, equity, and ability to pay.

If you, like other nonprofit professionals across the state, are concerned about how the state’s fiscal issues will affect your organization and your ability to serve your community – join us this week in making our collective voice heard. Our sector is an important economic driver in Alaska and we provide critical community services that aren’t available in any other way. Our sector will only thrive when the state’s fiscal challenges are met.

We believe the best way to achieve this is through a balanced and comprehensive fiscal plan that includes a fair, equitable, and progressive revenue source.

Here are two actions you can take this week:

1. Call – Write – Email

For organizations that support a comprehensive fiscal plan, the most effective thing you can do is to call or send a note to your senator or representative and copy the leadership (Sen. Pete Kelly, Sen. Berta Gardner, Rep. Bryce Edgmon, and Rep. Charisse Millett, and members of the Senate Labor & Commerce Committee so everyone can count up the support).

Below are ideas for what you can say. Personalize these notes to make them yours:

  • I am your constituent and I vote.
  • The time is NOW for a comprehensive fiscal plan.
  • We, the people of Alaska, recognize the difficult challenges you face.
  • Lawmakers often say that their constituents don’t support an income tax. This is incorrect. When surveyed, Alaskans agreed that we need new revenue and they are open to a personal income tax.
  • The legislature and Governor Walker have made billions in cuts over the past three years. Further cuts jeopardize our communities, our local economy, and the nonprofit organizations that serve the entire state.
  • As a resident and a voter, I urge you to implement a comprehensive fiscal plan that includes a progressive revenue measure.

2. Testify

If you want to take an additional step and endorse a specific bill, there are several opportunities to act this week. You can learn more about the current HB115 here.

Public Testimony on HB115 will be taken Tuesday, Wednesday, and Thursday, April 25, 26, and 27 from 5 to 6:30 p.m.
Testimony is limited to two minutes. Please note that the Legislature prefers people to go to your local LIO to provide testimony. However, if that’s impractical, the committee chair’s office (907-465-4968) can arrange for you to call the off-net number (1-844-586-9085).

The Labor & Commerce Committee will hold additional hearings throughout the week for invited testimony and debate. A full schedule of hearings can be found here.

Contact information for your legislators

Below is a list of communities and neighborhoods represented by key lawmakers should you decide to activate your broad universe of constituents, friends, and family.

Sen. Click Bishop representing UAF and University West, China Ridge, Kenny Lake, Tok and Copper Center  [email and cc:,,,,,,,]
Sen. Pete Kelly representing Fairbanks [email and cc:,,,,,,]
Sen. John Coghill representing Fairbanks and North Pole [email and cc:,,,,,,,]

Sen. Mia Costello representing Jewel Lake, Kincaid, Turnagain, Lake Hood, Sand Lake, Spenard, Dimond, and Campbell Lake [email and cc:,,,,,,]
Sen. Cathy Giessel representing Northeast Anchorage, Anchorage Hillside, Indian, Bird, Girdwood and Portage  [email and cc:,,,,,,,]
Sen. Berta Gardner representing Spenard, Midtown Anchorage, U-Med [email and cc:,,,,,,]
Sen. Tom Begich representing Downtown Anchorage, Airport Heights, Fairview, Government Hill, Mountain View, South Addition, Russian Jack [email and cc:,,,,,,]
Sen. Anna MacKinnon representing Eagle River, Eagle River Valley, Southfork Valley, Birchwood, JBER [email and cc:,,,,,,,]
Sen. Bill Wielechowski representing Muldoon, Russian Jack, JBER, University Area, College Gate, Nunaka Valley, Wonder Park [email and cc:,,,,,,]
Sen. Kevin Meyer representing Huffman, O’Malley, Abbott Loop, Independence Park, East Dowling [email and cc:,,,,,,]
Sen. Natasha von Imhof representing Oceanview, Old Seward, Klatt, Southport, Bayshore, Taku, Campbell [email and cc:,,,,,,,]

Sen. Peter Micciche representing Kenai, Soldotna, Seward, Nikiski, Funny River, Sterling, Cooper Landing & Moose Pass [email and cc:,,,,,,,]
Sen. Gary Stevens representing Kodiak Island, Cordova, Homer, Anchor Point, Kasilof, Ninilchik, Yakutat, Seldovia, and Tyonek
[email and cc:,,,,,,]

Sen. Bert Stedman representing Ketchikan, Sitka, Wrangell, Metlakatla, Craig, Petersburg, Klawock, and Hoonah [email and cc:,,,,,,,]
Sen. Dennis Egan representing Juneau, Haines, Skagway, Gustavus and Klukwan [email and cc:,,,,,,,]
Sen. Gary Stevens representing Kodiak Island, Cordova, Homer, Anchor Point, Kasilof, Ninilchik, Yakutat, Seldovia, and Tyonek
[email and cc:,,,,,,]

Sen. Lyman Hoffman representing Bethel, Adak, Cold Bay, Cantwell, King Cove, Nenana, Hooper Bay, Sand Point, Tanana, Unalaska  [email and cc:,,,,,,,]
Sen. Donald Olson representing Barrow, Coldfoot, Golovin, Kotzebue, Nome, Nunam Iqua, Ruby, Selawik, Unalakleet, Wainwright [email and cc:,,,,,,,]
Sen. David Wilson representing Wasilla, Meadow Lakes, Knik, Big Lake, Pt. MacKenzie, Goose Bay, North Fairview [email and cc:,,,,,,,]
Sen. Mike Dunleavy representing Rural Mat-Su
[email and cc:,,,,,,,]
Sen. Shelley Hughes representing Greater Palmer, Butte, Chugiak, Lazy Mountain, Fairview, Eklutna, Peters Creek
[email and cc:,,,,,,]


At our leadership summit earlier this month, we launched a new tool to help you assess the financial health of your organization — it’s our “Indicators of Financial Crisis.”

We all know that a stressed organization operating with the best of intentions can still make ill-advised decisions – especially in the financial arena – and the results can be damaging. We also know that sometimes seeing a financial crisis is difficult. Our new tool will help you spot if you’re in crisis or coming close to one. Once you know, you’ll be able to take the steps to recover.

After you take the assessment outlined in this tool and if you believe action is needed you have several options. You can tap the expertise on your board or another outside resource. You may also call us at 907-743-1200. We have experienced staff who can review the assessment with you in a confidential, non-judgmental environment. And we can recommend steps to get your mission back on a solid financial footing.

We also are offering a webinar on Monday, May 1, which will be taught by Lead Capacity Builder Chellie Skoog who developed the tool. Chellie will walk you through the assessment indicators and answer any questions you may have about protecting your financial health and resiliency.

For a print-friendly version of the assessment, click here.