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Report from the Frontlines, February 2005

Dear Friend:

Last month, Nonprofit Quarterly asked me to reflect on the lessons nonprofits can learn from the response to the tsunamis in Southeast Asia. I'd like to share an update of those thoughts with you:

IRS Releases Proposed E-filing Regulations

Ready or not, e-filing is coming. On January 12, 2005, the IRS published proposed regulations on required e-filing. The proposed regulations provide two thresholds for determining whether a corporation or tax-exempt organization must file electronically: (1) the number of returns the organization files with the IRS annually and (2) asset size. Of course, filers who do not meet these criteria are still welcome to submit their returns electronically.

Newsletter Readers' Recommendations for Charity Reform

This may be a big year for the nation's charities. Early next month, an expert panel will deliver a preliminary report on charity reform to the Senate Finance Committee. Convened by Independent Sector at the request of committee chairman Chuck Grassley and ranking Democratic member Max Baucus, the panel's work continues the discussion of charity reform that the two legislators initiated in a hearing last June. The panel will submit its final report in the spring.

With the delivery of the preliminary report so near, we decided to consult our own panel of experts, GuideStar Newsletter readers. January's Question of the Month asked, "If you were advising the Senate Finance Committee on charity reform, what one thing would you recommend be changed?"

Readers made a variety of suggestions:

Preparing for Negotiation

Excerpt from the Stanford Social Innovation Review

You prepare for a negotiation by gathering information, both about your own interests, resources, and alternatives, and about your counterpart's. You determine your Best Alternative to a Negotiated Agreement (BATNA, what you would get if you walked away from the negotiation), set your target, and then attempt to assess your counterpart's target and BATNA. Be sure to research different sources and query outsiders for objective facts. Say you are getting ready to negotiate with prospective summer interns. Before you sit down with any applicants, call other NGOs and ask: "How much do you pay your interns? What kind of perks do they get? Do you give out tickets to baseball games or charity dinners?"

Before you begin, you should prepare a list of potential negotiating points. Begin with critical and obvious issues, and then try to imagine spheres into which the agreement might extend. Establish the value you place on each issue, and the value your opponent is likely to place, looking both for areas where your interests coincide and for potential trade-offs. Be careful not to lock on to a fixed idea of what your counterpart's needs and interests are. You need to remain receptive to new information that becomes available in the course of the discussion.

If you know who your negotiating counterparts will be, it's useful to determine what authority they will have, and to match your authority to your opponent's. For example, if you are negotiating a cause-marketing agreement with a possible sponsor, and your counterpart is authorized to sign off on the deal, be sure that you also have that ability. But, if your counterpart must run any proposal by colleagues before signing, then be certain that you also reserve that option.

Margaret A. Neale, Winter 2004
© 2004 by Leland Stanford Jr. University. Originally published in "Are You Giving Away the Store? Strategies for Saavy Negotiation" in the Stanford Social Innovation Review (Winter 2004). Reprinted with permission.

Margaret A. Neale is the John G. McCoy-Banc One Corporation Professor of Organizations and Dispute Resolution at the Stanford Graduate School of Business. She is also director of four Stanford executive education programs—Advanced Negotiation Program; Negotiation and Influence Strategies; Managing Teams for Innovation and Success; and Mergers and Acquisitions: Creating and Claiming Shareholder Value.