Business of Nonprofits – Columbia University

Erin and I teach a class we developed for Columbia University on the Business of Nonprofits. The class is part of the M.S. Nonprofit Management, and we think it provides a strong overview of the mix of common and/or important business and legal issues a nonprofit executive may encounter.

This Business of Nonprofits course is designed to prepare students to identify, understand, consider, and manage common business and related legal issues arising in the operation of a nonprofit organization. Operational legal issues are pervasive in every aspect of nonprofit management and governance, including: (1) decisions on organizational structures, (2) the design of collaborative relationships, (3) entering into contracts, (4) human resource issues, (5) the creation and use of intellectual property, and (6) the assessment and management of risks. Because of the increasingly complex legal environment nonprofits face, managers knowledgeable about the topics covered in this course will be better equipped to contribute to the structuring of external business arrangements and relationships, as well as to manage internal operational matters. This elective course is intended to provide a solid foundation of practical business and business law basics to managers, board members, and consultants working for nonprofit organizations.

Class 1: Introduction. Among the required readings for this class – Wallestad, A. (2021, March 10). The Four Principles of Purpose-Driven Board Leadership. Stanford Social Innovation Review.

Class 2: Legal Entity Structures and Forms of Nonprofit Collaboration. We explore various collaborations, including parent-subsidiary structures. A favorite graphic we include in this class – La Piana Consulting. The Collaborative Map.

Class 3: Forms of Nonprofit Collaboration, continued. We cover both mergers and affiliations between different types of tax-exempt organizations (501(c)(3) and 501(c)(4)). Among the required readings for this class – La Piana, D. (2010, Spring). Merging Wisely. Stanford Social Innovation Review.

Class 4: Contracts. We examine basic elements and provisions of a contract and why they are important in different contexts.

Class 5: Employee & Human Resources. Employment and HR-related issues are critically important to sound management, and we devote two classes to this area. We start with a review of basic principal-agent laws and the importance of delegated authority and oversight. We continue with both a practical and legal look at common employment issues from hiring, worker classifications (employee – independent contractor, volunteers, interns), compensation, protected activities, and how some of these issues may be approached from an equity (and DEI) perspective.

Class 6: Employee & Human Resources, continued. We dive more deeply into anti-discrimination and sexual harassment issues as they impact employee management. Among the required readings for this class – Equity in the Center. (2019). WOKE to WORK: Building a Race Equity Culture.

Class 7: Earned Revenue & UBIT. We explore earned revenue activities of nonprofits and their tax implications. Among the required readings for this class – Hager, M. & Hung, C. (2019, April 10). Is Diversification of Revenue Good for Nonprofit Financial Health? The Nonprofit Quarterly.

Class 8: Cross-Sector Collaborations. We examine various collaborations between nonprofits and for-profits, including joint ventures. Among the required readings for this class – Sanders, M. Navigating Ventures between Nonprofit and For-Profit Entities – National Geographic Society and 21st Century FOX: Thoughts on a New Deal. Nonprofit Information.

Class 9: Cross-Sector Collaborations, continued. The focus of this class is on public-private partnerships and fiscal sponsorships. We also tie lessons from earlier classes (contracts, employment issues, earned revenues and UBIT) to their significance in the context of cross-sector collaborations.

Class 10: Intellectual Property. We review basics of intellectual property issues, including copyrights, trademarks, and patents, and the use of the Creative Commons license.

Class 11: Real Property. We examine common real estate-related issues ranging from leasing, sharing space, owning real property, using subsidiaries, and accepting gifts of real estate. Among the recommended readings for this class – Jarrin, S. (2020, August 21). Is It Time to Break the Lease and Imagine Shared Spaces? The Nonprofit Quarterly.

Class 12: Risk Management. Risk management should impact all areas of a nonprofit’s planning and operations, and we discuss risk management strategies, policies, and tools, including various forms of insurance. Among the recommended readings for this class – Herman, M. & Gloeckner, E. Contemplating Coverage: Insurance for Nonprofits. Nonprofit Risk Management Center.

Class 13: Data Privacy, Cryptocurrencies, & Final Thoughts. Data governance, management, and privacy are critically important aspects of nonprofit management, and we were fortunate to have recorded a presentation by Lucy Bernholz, Senior Research Scholar at Stanford University’s Center on Philanthropy and Civil Society and Director of the Digital Civil Society Lab, for this class in 2020. We also examine cryptocurrencies and touch on some other topics for this final class before the final exam.

Class 14: Final Exam.

Columbia’s M.S. in Nonprofit Management prepares graduates for leadership roles within mission-driven organizations in a wide variety of contexts, including global and community nonprofits, foundations, education, healthcare, the arts, or as fundraising and development experts. The program reflects the growth and increased sophistication of the nonprofit sector, as well as the need for nonprofit organizations to demonstrate impact more effectively. Students become conversant with new technologies, digital media, and data analytics, as well as public-private partnerships, which are being deployed to help solve some of the most intractable problems across the globe.