Tuesday, May 18, 2010

Quadruple Bottom Line: People, Planet, Profit AND Program


Believe it or not, the world is beginning to get used to a Triple Bottom Line, not just the usual single one of cold hard cash.

The Triple Bottom Line is the 'valuation' of the good an activity does for three important criteria: the people (staff, customers, community, the world). the planet (from the immediate surroundings, to your bio region, to the world), and for profits.

Well now it's time for a Quadruple Bottom Line - add a fourth "P" - Program.

For museums this is critical. We always consider our mission - our program - in decision-making. Well when you're considering a green practice, it matters how green affects, supports, or interferes with programming. So add it to your equation as you try to balance it all.

Here's an example: Someone has suggested that when you replace the roof membrane on your building, that you consider a green roof. After you get through sorting out whether or not your structure is appropriate for a green roof, consider the good it does for each of the four "Ps".

People: With a sturdy fence around it, and the right construction, the green roof can be good for People because it provides a green outdoor space far more pleasant than a classroom, more flexible than an exhibit, and way more relaxing than a picnic table by the loading dock.

Planet: It's good for the Planet insofar as it reduces energy use: by reducing heat-island effects it reduces the cooling needs inside your building and in the area around your building, and it provides more insulation in winter. It also creates a teeny bit of natural habitat, and helps manage stormwater runoff by slowing down the runoff and cleaning it up. If you capture and reuse the runoff you help the Planet even more.

Profit: Up front the green roof may not help profit, but if you have to replace parts of the roof anyway, the first-costs are well under control; and since a green roof by nature protects the membrane from sun degradation, you'll get a longer life out of your entire roof. So by saving energy, reducing water use, making the roof last longer, and timing the build with a necessary renovation, it's sounding like a great investment.

Program: And if you can use this space for educational programs like growing a Victory Garden or teaching about bugs and butterflies; or you can use it for financial sustainability: to compliment your cafe (like the one at the MCA Denver in the photo) or to host fundraising events, or as a setting for yoga for mom's while kids play, you're on the plus side again.

So, when you make that next decision about a green practice or project, consider the whole bottom line, QBL, so your choice makes sense for the whole museum, not just one quarter of it.

Thursday, May 6, 2010

The PILOTs are Coming: Use Sustainable Practices to Pay your Payments in Lieu of Taxes

The PILOTs are coming; the PILOTs are coming – even to little Concord, Massachusetts.

As more financially-stressed municipalities turn to PILOTs – Payments in Lieu of Taxes – and other nonprofit fees to build revenue, wary nonprofits are exploring ways to respond. ‘Right’ or ‘wrong’ is no longer the discussion; mitigation is.

I believe that by using sustainable practices to reduce demands on municipal utilities and services, museums could challenge their costs to the city: measure the reduced demands you make on city services through your green practices, and use that to stave of requests for PILOT fees.

Municipalities including Boston, Pittsburgh, Philadelphia, Baltimore, Indianapolis and even Concord, Massachusetts, are beginning discussions about PILOTs and asking mostly large, but even small nonprofits like Concord’s Emerson House to make payments to the municipality. What’s a museum to do? No, it’s currently against the law to tax a nonprofit, but these requests are in lieu of taxes; they are pressure points, not tax bills.

Now I’m all in favor of responsibility, but I’ve been preaching the green practice is a museum’s responsibility and that green practice reduces museums’ costs to the municipality. I think it’s our responsibility to reduce those costs, but I also think that museums should get credit for those savings in lieu of Payments in Lieu of Taxes!

Since PILOTs are about money, the negotiations between the museum and the city will require quantification: the value of your services, the cost of your demands on the municipality, and fair compensation on both sides of the equation. Measuring the benefits of environmentally-sustainable practice is your ace in the hole:

- how much has waste-reduction reduced your museum’s demand on municipal disposal services?
- how much has water-use reduction and stormwater management reduced water flow from your site?
- how much have energy-saving measures reduced your demand on public utilities?
- how have your museum’s transportation policies and practices reduced demand on transportation infrastructure?

If you’re using this tactic now, or if you do decide to use it, please let me know. I’d love to work with you on this!

A few links for the curious:
Concord and the Ralph Waldo Emerson House
http://www.massnonprofit.org/news.php?artid=1925&catid=13

Boston’s Task Force and plans for
- creating “a consolidation program and payment negotiation system, which will allow the City and its tax-exempt institutions to structure longer term, sustainable partnerships focused on improving services for Boston's residents”;
- clarifying “the costs associated with providing City services to tax-exempt institutions” and - developing “a methodology for valuing community partnerships made by tax-exempt institutions.” http://www.cityofboston.gov/assessing/PILOT.asp

Overview of Cities asking for PILOTs: Boston, Cleveland, Pittsburgh, British Columbia
http://lawprofessors.typepad.com/nonprofit/2009/11/local-tax-exemptions-at-risk-boston-cleveland-pittsburgh-and-british-columbia.html

Hawaii, Kansas, Pennsylvania, etc., etc.
http://www.nytimes.com/2010/02/28/us/28charity.html

The Situation in St. Louis.
http://www.stltoday.com/stltoday/news/stories.nsf/stlouiscitycounty/story/9F3DB4701FB3A495862576FE000A93D1?OpenDocument

A Blog Post suggesting students might help measure the value for Penn:
http://temple-news.com/2010/03/29/sans-estimates-city-nonprofits-have-no-landing-strip-for-pilot/

Call for Nonprofits Participation in Policy Discussions
http://www.blueavocado.org/content/attack-tax-exemption-killers

The National Council of Nonprofits report “State Budget Crises: Ripping the Safety Net of Nonprofits” http://www.councilofnonprofits.org/sites/default/files/Special-Report-State-Budget-Crises-Ripping-the-Safety-Net-Held-by-Nonprofits.pdf