The Aspen Institute recently published a report that made some very smart suggestions for bolstering the nonprofit sector. Here is a brief explanation of our favorite five of the Institute's ten suggestions.
1. Generate growth capital for nonprofits through a Social Investment Fund
For-profit companies have access to many financial tools to bring innovative products to market such as bank loans, stock sales, and government subsidies. Nonprofits face a fragmented capital market with limited options. Setting up a Social Investment Fund Network could bring together federal money with state, local and private sector contributions and distribute funds to nonprofits that rise above the crowd in the potential to achieve big results in solving societal problems.2. Establish a tax code for nonprofits that mix business with social missions.
A new breed of social entrepreneurs is showing that nonprofits can combine business with their charitable missions and succeed in providing social good. The federal tax code has no provisions for identifying or describing these "hybrid" organizations and provides tax-exempt status on purely nonprofit groups. Creating a new tax code designation could open up loans from foundations and other new forms of capital.3. Extend the deadline for making tax-deductible donations to April 15.
This is a no-brainer. Just as having until April 15 to make contributions to our IRA accounts puts the thought in our minds just as we are doing our taxes, so the extended deadline for donations would benefit from this crucial timing and reminder.4. Create a Small Business Administration for nonprofits
What a great idea. Small nonprofits have proliferated in recent years and serve a vital function in their local communities. These groups often supplement the social service endeavors of states and municipalities. A small nonprofit administration could, like its small business counterpart, provide training on leadership, capacity building, management and legal issues.5. Improve disaster relief by meshing local nonprofits with official responses.
One of the tragedies of recent large-scale disasters such as Hurricane Katrina has been the lack of inclusion for a host of small and faith-based organizations that tried to help. Government agencies overlooked and ignored the potential value of small, local groups. Many of these groups are not traditional disaster responders but they know what is what on the ground and could help immensely.Be sure to read the Aspen Institute report for more great policy ideas and for links to extended resources for each one.
