Thursday, April 10, 2014

Companies with a Nonprofit Soul: L3Cs and B Corps

What happens when a business develops a non-profit mindset, and wants to use income for social good? Or a nonprofit develops an idea for a profitable business model?

There are a growing number of legal and taxation structures for businesses large and small who want to do good in the world, yet remain a for-profit enterprise.

This post is a companion piece to the panel discussion "L3C: Companies with a Nonprofit Soul" at the 2014 Association of Fundraising Professionals Breakfast.

Panelists speaking: Rob Stenson, Priscilla Mendenhall, and Sy Rotter. Moderator: Lisa Bunker. Organized by Heather Hiscox.

Social Enterprise Structures

501c3: The 501c3 designation allows for federal tax exemption of nonprofit organizations, specifically those that are considered public charities, private foundations or private operating foundations. They must be organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or to foster national or international amateur sports competition, or for the prevention of cruelty to children or animals. (Source: 501c3.org)

L3C: A low-profit limited liability company, also known as an L3C, is a new kind of limited liability company (LLC) that combines the financial advantages of the traditional LLC form of business with the social benefits of a non-profit entity. In addition, as a variety of LLC, the L3C generally shields its owners from the debts of the enterprise. (Source: Marc J. Lane) Essentially, it is an LLC where the social mission is its primary purpose.

B "Benefit" Corps: B Corps are corporations certified by the nonprofit B Lab to meet rigorous standards of social and environmental performance, accountability, and transparency. (Source: BCorporation.net)

L3C Resources
Local Social Enterprise
B Corps Resources
Panelist Contact information
Priscilla Mendenhall: Priscilla@dishesandstories.org, tel. 202-746-1022
Lisa Bunker: Lisa.Bunker@pima.gov
Rob Stenson: rstenson@goodmans.info
Sy Rotter: syrotter@wlousa.net

Tuesday, April 8, 2014

Social Media News Roundup

There is tremendous buzz in social media circles over recent changes at Facebook and Twitter. Twitter is changing its interface to be more like Facebook, and Facebook (in addition to visual changes of its own), has been showing our Page posts to fewer and fewer people. The day is coming, we believe, when all page posts will have to pay to be seen; will you pay? Or move your activity to Twitter or Google+?

Here is a roundup of what we've been reading:

Social Media Strategies

Decline of Free Facebook Reach

Facebook Management

Reconsidering Google+

Twitter Tips

Twitter's Redesign

Thursday, March 20, 2014

Crowdfunding Advice From Xerocraft

Incentives from Xerocraft's Indigogo campaign
By Jeremy Briddle

The folks at Xerocraft Hackerspace completed a successful Kickstarter campaign in August of 2013, as well as an earlier campaign in May of 2013 with Indigogo, and Jeremy Briddle agreed to share what they learned with us here at the Café.

Give yourself lots of time to send rewards
Kickstarter funders are pretty used to waiting for their rewards. Estimate the amount of time you think you can deliver your rewards quickly but comfortably - and double it.

Don't expect anyone to help you fulfill rewards
The whole process from setting up your Kickstarter to running the fundraiser to sending out the rewards is a months-long endeavor. Make sure you surround yourself with a team of dedicated people you know will stick with you and help out until the fundraiser is complete and the last reward is shipped. If you don't think you have those people, rethink your campaign and consider making it less ambitious (e.g. smaller funding goal, fewer reward tiers, etc.).

Offer rewards you know YOU can make or acquire easily. Basically, plan for the worst and hope for the best. The worst that I plan for is that in the end the entire campaign will fall squarely on my shoulders to maintain and complete.

Make reward tiers as sparse as possible. It will make fulfilling and packing them easier. Don't worry if rewards don't quite equal the reward price in your mind. The funders don't care as much. They're more interested in funding a campaign they feel compassionate about than receiving a t-shirt.

Get the packaging and S&H costs nailed down
Underestimating the size and weight of packages can cost you a lot of money that was supposed to go toward your project. The price you think it will cost to ship what you think the package will look like and weigh and what you'll actually ship months later can vary widely.

Do your best to make a “test package”. A test package is a box that is just the size you need packed the way it should be to survive shipping (packing peanuts are the best) with the rewards inside. When you have the box set and ready for shipping, weigh it, measure the dimensions and write it all down somewhere safe.

Investigate your shipping options (e.g. USPS, FedEx, UPS) and figure out early who you will go with. USPS is typically cheapest. Take the test package to the post office teller and ask them for the price to ship it to the other end of the country (supply them with a zip code from that area; Google is your friend for that). This will give you a good idea of how much the shipping will dig into your funds.

Also keep in mind that you will need a lot of boxes this size so make sure you have a source. USPS has many boxes available for free. They also have more boxes of other dimensions than what's available at the local post office that they will ship to you for free or nearly free.

Keep in mind that USPS offers several different shipping services with their own boxes. If you pack all of your rewards into Express boxes but you're shipping via Priority, they will not ship them and you will have to repack everything or go with the other service.

BUT if the box is small enough, you can put it into one of USPS's large envelopes (also free) that does have the proper service labeled on the outside. This will save you the trouble of repacking.

Cutting USPS boxes to the size you need tends to freak out the post office employees, though it (apparently) isn't illegal or a barrier to them shipping the package (in my experience). However, using a USPS box to ship a package via another service (UPS, FedEx, etc.) is a federal crime.

Think hard about whether or not you will allow international shipping. Shipping internationally involves additional paperwork for customs, etc. And the cost is easily 3 times the cost of shipping nationally.

Host a wrapping party to get the rewards ready for shipping. Make it a fun party with movies, games, refreshments, etc.

Make a great fundraising video
For Xerocraft's video we really lucked out in getting it to look good. I was a film major in college, I have high-end video editing software on a decent computer, access to a digital camera that records 720p HD video, and access to a broadcast quality sound booth at my job to record the voiceover. Not everyone will be this lucky but do what you can. Talk to friends, look on Craigslist. Talk to IFASA (facebook.com/groups/ifasa) or Independent Film Arizona (facebook.com/indiefilmaz) about getting local filmmakers and freelance film crew to help you.

Write lots of updates. Record video updates on your smartphone!
Keep funders up to date on your campaign with blog-style updates. Do them as often as you can to remind people you're serious about your project.

Videos recorded on your phone are easy to upload. Don't worry about making it flashy and high quality like the fundraiser launch video. Videos get noticed. People will fund a campaign they fell passionate about. Generate that passion in your video updates.

Look at other, past campaigns
Old campaigns are still available to view on Kickstarter and Indiegogo. Look at ones that were similar to what you want to do and take the good ideas. Look at ones that were unsuccessful and try to avoid their mistakes.

Indiegogo offers “flex funding”
Flex funding means that if you don't hit your goal, you can still take most of the money you did raise. If you're worried about hitting your goal or this is your first time fundraising online, Indiegogo may be the right place to do a practice run. 

Tuesday, March 11, 2014

Wading Through the Crowdfunding Options



Written by Kassy Rodeheeaver and Lisa Bunker, Pima County Public Library

Crowdfunding has seen overwhelming successes in both the nonprofit and business realms. A recent IndieGoGo campaign raised over $1.3 million for a nonprofit to purchase land for the Tesla Museum  (http://www.indiegogo.com/teslamuseum), while Roberts Space Industries raised over $6.2 million (http://www.forbes.com/sites/erikkain/2012/11/19/star-citizen-smashes-previous-video-game-crowd-funding-records-raising-6-2-million/) through its Kickstarter campaign and the company’s website for the development of an online video game called Star Citizen. With these great successes, web developers the world over have jumped on the bandwagon to expand and build on crowd-funding models for clients. 

If you have done any research at all, you’ve probably found at least three or four contending platforms that you could use to host your own crowd-funder.  
Trying  to decide which model fits your funding needs best can be a nightmare, but we’ve come up with some criteria for you to consider while evaluating your choices. 

Eligibility
The first thing that you should check out when looking at a potential crowd-funding platform is if your project or organization is even eligible to use their services. This is especially true in the case of nonprofits. Some platforms require that you are recognized by the IRS as a 501(c)3 organization. Other sites may not be as stringent with that requirement, but if your donors are savvy about their charitable donations they may want the added benefit of being able to claim tax deductions by giving to only  organizations with IRS recognition. Some of these platforms will also automatically generate gift receipts that donors can print out for their records. Another thing to consider is that by working with a platform that requires nonprofit projects to have 501(c)3 status, you may be giving your project a little more credibility than if you were to host it on another platform that doesn’t have this requirement. 

If you are looking at crowdfunding from a business perspective, you may be limited in terms of the types of businesses allowed. For example, Small Knot requires that you be a small, local business to use its services.

Context
Another aspect that you should consider is whether or not your parameters fit neatly in the format of the platform. Some platforms require that you have a specific program or project, while others allow you to raise money for general support. Platforms may also have a theme for the projects that they host—whether it is art (http://www.unitedstatesartists.org/), social or economic projects (http://www.openideo.com/), or automotive projects (http://fundinggarage.com/). These are just a few of the more unique audiences that crowd-funding platforms reach. 

Crowd-funding platforms also vary in terms of their gravitas—some are more light-hearted or irreverent than others. Crowdrise features a picture of a napkin (http://www.crowdrise.com/about/napkin) that is on their website’s “About Us” header, which seems to speak volumes about how they present themselves and wish to be viewed by others. Environments like these may not always be appropriate for your project, but then again, perhaps they are the perfect match for your work.

Customer Support
How much support you need to get started on your first crowd-funding project may determine which platform is the best for you. Most of these services are very intuitively designed and easy to set up. However, if you encounter any unanticipated difficulties, having someone that you can actually talk to may make all difference. Visit their “Contact Us” or “Support” page to see what your options may be. Is someone always going to be available to assist you, or are they only available from 8-5 Eastern Time? Can you call, email, or chat with a live person, or are you forced to work out your problems from their FAQ or Help pages?

Commission
Many of the crowdfunding platforms are for-profit businesses, but there are costs associated with using even non-profit platforms. They need server space, bandwidth, and they need to pay their employees. Payment processing fees generally hover around 3% of the pledged or donated amount, but you will see a wide range of total fees across platforms to cover their overhead. Some of the platforms have clearly stated their commission rate, while others package processing and use fees together as one number. There are a few platforms that are completely free, but you should definitely look at the other criteria before deciding which one would be best for you. 

The goals you set and reach for your fundraiser may also impact the commission rates. Some platforms will still allow you to collect the money you raise, even if you do not reach your goal (known as “Keep it All”). However, these models often see much higher rates than other platforms that require you to reach your goal to receive any funding (known as “All or Nothing”).  

IndieGoGo, RocketHub, and MedStartr are all examples of platforms where this is true. Some platforms require that you identify which model you wish to use before the crowd-funding time period begins.

Adaptability
Not everyone’s crowdraising experience is going to be the same. You need to make sure that the platform you choose has all of the features that are important to you. For example, a tried and true method of getting more people to donate is to have a matching fund donor. If this is a component of your online fundraiser, make sure that you can highlight that in some way in your campaign. 

Another thing to consider is if the platform allows you to enter offline gifts as part of the funds towards the goal. This may or may not be important if you advertise to your donors and supporters ahead of time that they need to give through the crowd-funding platform to have their donation count, but there will most likely still be those who go to your website to make the donation. 

Public Side
One of the most important things to consider is what the public view of your crowd-raiser looks like. The design or layout of the page or pages will impact how many ways you have to engage your supporters. Photos, videos, and space for the written explanation of your project are all vitally important to a successful fundraiser. As anyone experienced with online fundraising would tell you, making it easy to donate is imperative. The donate button should be clearly visible, and the format of actually making the donation should be as seamless as possible. You may also want to look for a platform that recognizes your donors and their pledges on the page. 

You should also consider if you can post updates on the campaign progress and how that information may reach your donors. This is also a very social way of fundraising, so consider checking to see if your donors can interact with you by making comments about the fundraiser. 

It is also vitally important that some type of sharing mechanism is embedded in the design of your crowd-raiser so that your supporters can re-post the page through their preferred social media channels to help raise awareness and reach more people. 

Methods of Payment
Crowd-funding platforms usually use a third-party service to process payments. You may want to review their processing options to see what is available to you. If your project needs immediate funding, you don’t want to use a system that processes your payments on a monthly basis. The options will of course depend in part on the structure of the crowdfunding platform that you choose (“Keep it All” or “All or Nothing”), but this should be considered if you’re doing a longer campaign. You could find yourself locked into using a service without any other alternatives. 

Customizability
Branded donation pages raise more money (http://onlinegivingstudy.org/quarterlyindex) than non-branded pages. However, this may not matter as much if you’re looking at a crowd-raising schema where you’re trying to engage new donors who are unfamiliar with your website’s look. However, you should be able to find ways to link back to your website to easily give people a way to get more information about your organization should they desire it.

Donor Information
The last thing you may want to consider when choosing the right platform for your crowd-funder is how easy it is to collect donor information from the website. You’ll want to be able to easily download supporter information to your donor or client database so that you can continue to contact them with information about your work. 

Here is a quick chart for you to use to create a matrix of your top contenders to help you decide which one will work for you. We didn’t include eligibility, because if your organization doesn’t fit with the platform, there is no reason to compare it with other options!

CROWDFUNDING PLATFORM WORKSHEET

Platform #1
Platform #2
Platform #3
Context: What other types of projects are on the platform? What is the tone?



Customer Support: How easy is it to get help? What methods do they offer (email, phone, chat, etc.)?



Commission: How much of your funding would they take?



Adaptability: Do they offer features that your crowd-raiser needs?



Public Side: How user friendly is the page? How can you tailor your message?



Methods of Payment: What payment processing system do they use? How long til you get the money?



Customizability: Can you brand the page with your organization’s look?



Donor Information: How easy is it to download supporter information?




Sunday, January 26, 2014

Creating Community Online: A Top Tech Trends Talk

I spoke this morning at the American Library Association's Midwinter Conference, in Philadelphia. Our panel covered "Top Tech Trends," and my topic was how libraries can do a better job of creating community online. What follows is a fleshed out version of my contributions to the panel discussion. I think it is applicable beyond libraries, to any business or organization that wants to use social media to create real relationships with their following.

To put it simply, the libraries and organizations who understand that social interactions on the internet are real are going to be more powerful and effective on social media.

This means having the same thoughtfulness and interest and investment in others that we do at our service desks. It also means to be yourself, to be real.

Why not do programming? Why not share jokes? Why not put effort into acknowledging special days? Why not make the place you live and work present in what you post? Why not share secrets every now and then? Why not show how much you and your colleagues enjoy what you're doing?

https://www.facebook.com/photo.php?fbid=10151352214046967&set=a.212479851966.162304.35653261966&type=3&theater
Courtesy of Hillsdale Public Library Facebook page
Write (and photograph) with a Sense of Place
One of my favorite Facebook pages is the one written by the Hillsdale Public Library, in Hillsdale, NJ. They've created a running internet joke based upon the signboard positioned outside the library. Every time I read the update I picture a real person with a smile on their face and a twinkle in their eye. A recent favorite appeared at Christmastime: "Max out your library card this holiday season." Always, the post is a photo of the sign with the library's entrance signage just behind it. It works because it is clever, timely, location-specific, and corny fun. They've created their own meme that is directly connected to their physical existence, a link between the experience of the people who walk through the doors of the building with the people who visit them online. I see their pictures shared well beyond Hillsdale, on other library's and book lover's pages. How great is that?

A birthday card
On our accounts I have shared personal photographs of our city and location, a scenic valley between 4 mountain ranges. Sharing an extraordinary moon rise or a freak snowfall as the library is easy to do and has always been very popular. Aside from the visual appeal, I think these work because they remind readers that yes, their library staff live there too, and love what they love. It doesn't have to be all books and events.

Kitchen window with seed library seedling
Be Yourself, and Share your Passion for What You Do
Another example is the Seed Library of Pima County's page, written by one of my colleagues in Tucson. Justine Hernandez and her team regularly get out of the library and to photograph our library gardens, community gardens, and farmer's markets. She has even photographed her own garden and shared her squash failures along with her tomato successes. No stock photography here.

Here's the payoff. In 2 years, the Seed Library Facebook page has become the second largest page on sustenance gardening in the southwest, and a strong voice in Tucson's local food movement. Even more dramatic, the seed library was launched at a time when our Community Relations Coordinator position was vacant and there was no press release, no publicity poster, no traditional publicity*. And yet, the grand opening was attended by about 2,000 people including 20 vendors representing gardening clubs, seed preservation groups, the food bank, and community gardens. She has positioned the library at the center of the gardening community in Tucson.

It's important to point out another factor in their success: Justine, Susannah and Kelly consistently get out of the library into the community and build relationships in person too. What's different, I believe, is that they've integrated their social media presence with all their programming, as well as how they've been willing to be themselves online and talk to their readers as friends.

*There was a substantial article in the local newspaper, but it was because an alert reporter heard about the Seed Library in the works.

Try programming on Facebook or Twitter
We learned from Multnomah County Library the possibility of doing live reader's advisory on Facebook. Though staff-intensive, "What Do I Read Next Day" one of the most popular things we do. Advertise the day/hours, and the morning of the event make a post asking your community to comment with a list of the last three books they've read. At the library a group of our best-read library staff field the requests and reply to the comment with books custom-selected for their reading tastes. Our Facebook community tells us they love seeing everyone's requests, and they chime in when they have additional recommendations.

Another type of participatory programming I've tried is to go beyond fill-in-the-blank posts and challenge our readership to make something simple and send it to us. National Poetry Month is a natural for this. Last year I asked everyone to send in poems written with spines of books, and posted 2-3 every day for the month. Everyone loved the project and that their contribution was recognized by the library. Another year I asked staff to write haiku about books, reading and libraries, for sharing with our readers on Facebook and Twitter, and posted one a month during April.

Cosplay at a library event, with props created for photographs
Bake Social Media Behaviors into Event Planning
You know how everyone loves to photograph each other having fun to share online with their friends? Build this into your larger events by providing photo backdrops, props, or just a photography area. At Potter parties over the ears we've made signs to pose with (above) or detention slips for "Professor Snape" to hand out. At our Manga Mania!! mini-con we have a photography area where we will document the amazing costumes made for the event. After the event they are posted on our Flickr account, and (selectively) on our social media accounts.


A tweet from the same event
Hashtags are more powerful than ever
Most of the major social media platforms (specifically Twitter, Tumblr, Instagram and now Facebook) turn hashtagged words into links to everything else tagged with the same word.

This means that for large, photogenic events it is worth the time to choose a hashtag before an event, and advertise it before and during the fun. Include the hashtag on the posters, slide decks, signage, etc. at the venue, especially near any photo opps.

Why? You can look at the hashtags after the event and curate the story of the event as seen through the eyes of people who came, using software like Storify. An event narrative like this is a great way to report on an event after the fact (see what fun you missed?) and as a thank you to your programming partners. By the way, Storify only pulls from public posts, and notifies the creators of the inclusion of their post in the story.


Multiply Your Channels Through Your Programming Partners
Are your programming partners on social media?

Communicate with your partners and sponsors when you post so they're sure to share your posts, and be sure to share their posts. The easiest way is to tag them -- if they're paying attention they will be notified of your post (and hopefully share it).

The thing is, they will reach people who haven't discovered your page yet, or even your library, and their posts will magnify your reach.

True story: in 2011, we put on a party when Harry and the Potters came to perform. We figured (based on previous performances) that 500 people would come, planned on 1000, and were amazed when nearly 3,000 people showed up, in costume. I think the difference was that it was the first year we had programming partners (a big used bookstore, a beloved toy shop, and the hotel where we held the event) with a strong following who were great about getting the word out to their following.

Holiday cards

Make Greeting Cards, Plan Online Holiday Programming
This is something I learned from online fandoms. Holidays always have special events that fans look forward to.The shenanigans surrounding April Fools, and May the Fourth Be With You Day are a huge draw to their websites. Give your staff a heads up when Funny Hat Day (July 9th) nears, and celebrate it on social media too.

I've made special "greeting cards" for holidays like Veterans Day and New Years that feature staff and our scenery (above).

Please share your own discoveries in the comments! 

The next post will be looking ahead to a post-Facebook world. Thanks for reading!  --Lisa

Wednesday, January 8, 2014

An Exciting Proposal

We'll be growing! The Café is outgrowing it's Board Room, our microbusiness and self-employment classes are ramping up, and we know we could be doing so much more to help people in Pima County find work and start businesses.

The Library is seeking funding for a full-service entrepreneurship and job help center downtown at Main Library. We envision it will be a place where anyone can come get help, whether they're starting over, or a startup. We are planning rich resources and a variety of programming so that jobseekers and the business-curious could visit over several days and find something new every time.

Functionally, we expect this space will have a teaching lab, breakout rooms, and a meeting area perfect for the Catalyst Cafés.

What will it be like? We don't know yet, but we are looking at several existing library entrepreneurship centers in Arizona and around the country, as well as facilities for coworking.

Eureka Loft, Scottsdale Public Library
Here are some examples of what other libraries are doing:
Eureka Loft, Scottsdale Public Library   
ThinkSpot, Mesa Public Library
Digital Commons, Washington DC Public Library   
The CoWorking Space at Richland Library, Columbia, SC
Business Science and Industry Department, Philadelphia Free Library      
Small Business Center, San Francisco Public Library

And here are some coworking spaces we're looking at:
WeWork, NYC
Entrepreneur Works, Philadelphia, PA

Dogpatch Labs, Cambridge, MA
Entrepreneurs Roundtable Accelerator, NYC   
GreenSpaces, NYC
The Yard, NYC
Vuka, Austin, TX

I want to make this planning process as open as possible, so watch this space for more news. --Lisa

Friday, November 22, 2013

Where to Read More about L3Cs

What is an L3C?

An L3C, or "low-profit limited liability company" is a for-profit company where the investors accept limited dividends. (Source: panelist Sy Rotter)

But Really, What is It?
Effective Social Enterprise - a Menu of Legal Structures, by Robert A. Wexler, from The Exempt Organization Tax Review, June 2009.

Social Enterprise Attorney Explains the Benefit Corporation, L3C, and Flexible Purpose Corporation [Video] from Social Enterprise Buzz, December 2012.

Corporate Creativity: The Vermont L3C & Other Developments in Social Entrepreneurship, a Symposium, February 2010.

To L3C or Not to L3C? That was the Question, by Richard Marker, February 2013.

How To
Corporation Division of the State of Vermont resources

Organized Support
Americans for Community Development

Net Impact

Legislative History
History of the 2011 Bill, AZ SB 1503
This bill passed the Arizona Senate but was tabled in the House.

The L3C, Background & Legislative Issues, by Robert Lang, January 2013.

I am tremendously grateful to Sy Rotter (Washington Liaison Office LLC), Dr. Paul Melendez (UA Eller College of Management), Priscilla Mendenhall (Dishes and Stories), Michelle Lutz (Custos Fratris), Meredith Aronson, and Elizabeth Alvarez del Castillo for sharing their time and expertise on our Nov. 21, 2013 Catalyst Café panel.