How Effective Nonprofits Work: 
A Guide for Donors, Board Members and Foundation Officers

by Marcia Festen and Marianne Philbin

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Table of Contents

Foreword
by Marjorie Craig Benton

Acknowledgements

Introduction: About This Guide

Chapter 1: Nonprofit Basics
What is the Nonprofit Sector?
Nonprofits and For-Profits — What's the Difference?
What Do Nonprofits Do?
Nonprofit Structure

Chapter 2: Starting Points: How Nonprofits Begin and Grow
Nonprofit Phases of Development: From Inspiration to Institution
What Motivates Donor Interest at Various Stages of Organizational Growth?
Minimum Requirements: Essential Components Needed to Launch a Nonprofit
Wrong Reasons Nonprofits Get Started
What You See Depends on Where You Sit—Should Nonprofits Have All the Answers?

Chapter 3: Supporting Nonprofit Effectiveness
"Making a Difference": Assessing a Nonprofit Organization's Contributions to the World
What Does an Effective Nonprofit Look Like? An Assessment Tool for Donors
Characteristics and Practices of Less/More Effective Nonprofit Organizations
Signs an Organization is Working
Signs That Trouble is Brewing
What Can Donors Do When Nonprofits Are in Trouble?
What You See Depends on Where You Sit — Should Proposal Presentation Affect Funding?

Chapter 4: Vision, Mission, Program
Understanding a Nonprofit's Vision and Mission: Four Questions to Ask
Understanding a Nonprofit's Program
Building on Good Ideas: Questions That Lead to Effective Programs

Chapter 5: Getting the Job Done: Nonprofit Teams
Effective Nonprofit Boards
Effective Staff Leaders
Who Staffs Nonprofits — And How Does That Affect What Donors Should Expect?
The Changing Role of Donors

Chapter 6: Giving and Getting
Donors' Motivations and Expectations
What Should Effective Nonprofits Strive to Give Donors?
A Few Good Questions for Donors to Consider, by Buzz Schmidt
"They're Keeping a File on Me!" and Other Donor Concerns About Fundraising
What You See Depends on Where You Sit — How Should Nonprofits Track and Report Results?

Chapter 7: Finances and Operations
Financial Operating Realities

Adapting Business Principles to Help Nonprofit Organizations Make Sound Economic Decisions, by Dennis R. Young.
What Donors Can Learn from Financial Reports, by B. Kibbe et al.
Financial Red Flags
Program versus Administrative Costs
Written Policies and Why They're Important
The Annual Planning Process

Chapter 8: Keeping Nonprofits Healthy: Perspectives on Capacity Building
What Capacity Building Is, and Why Nonprofits Invest in Themselves
What Capacity Building Includes
Why Funding General Operations Supports Capacity Building
Why Funding Development and Organizational Infrastructure Supports Capacity Building

Appendices
A. Resources
B. Ethical Fundraising Principles and Standards of Professional Practice, as established by the Association of Fundraising Professionals
C. The Donor Bill of Rights, as established by the Association of Fundraising Professionals et al.
D. Glossary of Nonprofit Terminology
E. The Unique Roles Nonprofits Play, by Minnesota Council on Foundations



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