Category: Financing & Loans

Some time ago, I had a conversation with a group of colleagues about “expectations” in our relationships with clients – our expectations, and theirs !!

We all pretty much agreed that it really doesn’t make much of a difference what we spell out in our contracts regarding deliverables, as the client (who often won’t give the contract a thorough reading) has a vision of what s/he wants, that s/he believes the relationship with the consultant will provide.

For example, when I have a contract with an organization to “work with them to design and train them and their leadership to implement a major gifts program,” that contract will spell out my understanding of what (I believe) both parties are agreeing to do. No matter the wording, however, the client often sees the relationship as resulting in the acquisition of major gifts, not in the creation of any kind of a “program.”

Another common example: Where a consultant’s contract will spell out the fact that (in language required by many states) the consultant will never handle (have possession of) a client’s funds, and that the consultant will work with the client to plan/design (for example) a major gifts program and advise/train/direct the client in their fundraising efforts, it is so often the case that the client believes that the contract calls for the consultant to “bring in” those major gifts.

Even though I always spend some time discussing desired outcomes with prospective clients before I draft a contract, and even though we will discuss that contract a number of times … and may modify it each time before it’s ready to be signed, no matter how much discussion and re-writing precedes the signing of a contract, it rarely reflects the totality of what the client organization *really* wants … and what they expect to happen as a result of the relationship.

That doesn’t mean that they don’t get value for their money. Of course they do !!

But however the client benefits, it’s often not in ways they thought they would….

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Have a comment or a question about starting, evaluating or expanding your fundraising program? With over 30 years of counseling in major gifts, capital campaigns, bequest programs and the planning studies to precede these three, I’ll be pleased to answer your questions. Contact me at AskHank@Major-Capital-Giving.com
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Have you seen The Fundraising Series of ebooks ??
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If you’re reading this on-line and you would like to comment/expand on the above, or would just like to offer your thoughts on the subject of this posting, we encourage you to “Leave a Reply” at the bottom of this page, click on the feedback link at the top of the page, or send an email to the author of this posting. If you’ve received this posting as an email, click on the email link (above) to communicate with the author.

Grant proposals should go through a five-step writing process:
•  Plan: Think through your proposal section.
•  Organize: Use the grant guidelines as your outlining guide.
•  Write: Write in a free-flowing manner.
•  Examine: Walk away from your writing and review it later while letting others review it too.
•  Revise: Emphasize clarity, conciseness, correctness, and persuasiveness.

One of my previous postings (Plan And Organize Your Proposal Before You Write) discussed Planning and Organizing. This time, I will focus on the third step – writing the first draft of your grant proposal.

These are the steps you should take to write a good first draft.

•  Write the first draft quickly
Work from your notes and worksheet. Write heading and subheadings first and use them as a guide.
Begin with the easiest parts of your sections. (It is extremely rare for a proposal to be written linearly – from first page to last!)
Write quickly.
Do not worry about formatting and errors.

•  Use your outline
Focus on the funder’s hot buttons that you have identified.
Focus on your organization’s solution.
Validate, validate, validate!
Do not make claims you cannot prove.

•  Use paragraphs effectively
Limit your paragraphs to one main idea.
Begin each paragraph with a thesis statement.
Put the most important point first.
Use plenty of bulleted and numbered lists.
Put details at the middle and end of your paragraphs.
Make sure that your paragraphs flow logically.
Use transition sentences as your glue.

If you follow these steps to writing effectively, you should be able to produce a serviceable first draft of your grant proposal … in proper format.
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Dr. Jayme Sokolow, founder and president of The Development Source, Inc.,
helps nonprofit organizations develop successful proposals to government agencies. Contact Jayme Sokolow.
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Have you seen The Fundraising Series of ebooks ??
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If you’re reading this on-line and you would like to comment/expand on the above, or would just like to offer your thoughts on the subject of this posting, we encourage you to “Leave a Reply” at the bottom of this page, click on the feedback link at the top of the page, or send an email to the author of this posting. If you’ve received this posting as an email, click on the email link (above) to communicate with the author.

I work for a non-profit membership society as advertising and marketing manager, a position that falls under the umbrella of the development office. I am responsible for the advertising in our member publications and on our web site, and for selling sponsorships to local and national corporations.

I am having a difficult time separating out the difference between monies earned from selling sponsorships to a corporation and soliciting donations from them.

Should the two be recognized publicly as the same – such that all companies that sponsor and/or donate be grouped as Donors, or should there be a distinction between the two?

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The significant/functional difference between income from sales of sponsorships to corporations and contributions from corporations is that corporate expectations are different for both.

When a corporation buys a sponsorship, they expect specific visibility and recognition for the corporation and/or its leadership. In essence, selling a sponsorship is a contract between the NPO and the corporation — the corp. is buying what you told them they’d get for their sponsorship money.

If it’s an event, then there should be appropriate signage and/or visibility for the corporation on the event invitation and/or program.

Also keep in mind that the visibility you give to them, and to other sponsors, is part of how you are preparing for the next time you ask them to buy a sponsorship. It’s a case of “see what other corps got for being sponsors; you could get the same next time !!”

Sponsorships buy visibility and credibility and, therefore, help the corporations sell more of what they produce. Contributions from corporations “show” that they are “good members of the community” and suggest that community members should, therefore, “embrace” them and give them their “loyalty.” Corporations do give to support their communities, and to support the NPOs that provide services to their employees.

Corporate board members and executives also like to be recognized for their contributions, and they usually want to know beforehand what recognition they’ll get — a program listing, a listing in your annual report, a photo op — corp. exec presenting the check to your NPO’s ED or Board Chair.

Sponsorships and Contributions should never be “grouped” together, not only because they are obtained through different “processes” and come with different expectations, but also because they are perceived (by the corporations and your constituents) differently.

Bottom line, development is (at heart) marketing. It’s relationship building and enhancing — often on a one-to-one basis. It’s getting the prospect to want to do what it is that you want him/her to do — i.e., buying a sponsorship and/or making a contribution.

So, when it comes to corporations, the key to raising money is to first determine what their needs are — the needs of the corp. and the needs of the execs, then approach them with a plan (including either or both sponsorships and contributions) that will satisfy those needs.

Corporations that are buying sponsorships are not making donations. They are buying, not giving. Your record keeping (keeping the two income streams separate) will help you track which works best with which corporations. But, no matter which part of the corporate budget the monies come, the idea is that (for the most part) the sponsorship and/or the contribution will increase the corporate bottom line.

While I do not discount the many gifts to nonprofits from corporations that (really) want to support their communities, the basic approach to corporations must be with the consideration of how their bottom line will be impacted.

Of course all income goes to support the mission, but income of various types must be reported to the IRS in different categories. If you’re not familiar with IRS form 990, ask your organization’s leadership for a copy of a recent filing. If you wade through all the details, there will be some info that will address your questions.

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Have a comment or a question about starting, evaluating or expanding your fundraising program? With over 30 years of counseling in major gifts, capital campaigns, bequest programs and the planning studies to precede these three, I’ll be pleased to answer your questions. Contact me at AskHank@Major-Capital-Giving.com
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Have you seen The Fundraising Series of ebooks ??
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If you’re reading this on-line and you would like to comment/expand on the above, or would just like to offer your thoughts on the subject of this posting, we encourage you to “Leave a Reply” at the bottom of this page, click on the feedback link at the top of the page, or send an email to the author of this posting. If you’ve received this posting as an email, click on the email link (above) to communicate with the author.

This post was supposed to be Part 2 of Proposal Development for grants. I’m moving that post to February 7th, however, so I may share a couple of personal insights on year-end giving.

The holiday – and year-end giving – season is over. We’ve all packed away our lights and decorations, year-end donor lists, and holiday cards, safely storing them ‘til next year.

Before we move on and start working our 2013 fund development plans, I want to share some personal experiences and two insights that relate directly to year-end giving. Specifically, why children and non-board volunteers are important groups to consider in your year-end solicitations.

Like many families, my husband and I make year-end gifts to non-profit organizations; and, when my daughter was six, we started to include her in the process of selecting to which organizations we would give.

She has had a love affair with penguins since about age two, so she always selected wildlife organizations, and we would make a sizeable gift to the organization she selected.

This year, it hit me: if my daughter has a significant impact on my year-end giving, then this might be happening in other families, and it could be a good strategy to use in a year-end giving campaign. My fundraising expertise is in grantsmanship, but relationships are at the heart of all fundraising, and as with grants, the gift is much more related to what the donor wants to give than what the NPO wants to receive…

Insight #1: When developing your organization’s year-end giving campaign next year, consider appealing to all members of your donors’ families, even those too young to have a bank account.

This year my family also started volunteering for a wonderful animal welfare organization, Stray Rescue of St. Louis (strayrescue.org). We became direct service volunteers by fostering four puppies and helping them find their “forever homes.” Lots of work, lots of puppy kisses, lots of fun.

When I asked my daughter (now age nine) to select the organization she wanted to donate to, I expected the usual penguin/wildlife organization. Without hesitation, she selected Stray Rescue…

Insight #2: OK, this is incredibly obvious, and I should have thought about donating to Stray Rescue before my daughter suggested it, but consider soliciting your direct-service volunteers at year-end. They already know and love your organization, and will probably want to support you financially in addition to their gift of time. Lots out there on this topic, just search, “converting volunteers to donors.”

Bonus Insight: Ask your volunteers to share their (positive) experiences with your organization on their social media accounts. I started volunteering for Stray Rescue because a friend of mine kept posting pictures of her foster puppies on Facebook!
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Lynn deLearie Consulting, LLC, helps nonprofit organizations develop, enhance and expand grants programs, and helps them secure funding from foundations and corporations. Contact Lynn deLearie.
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Have you seen The Fundraising Series of ebooks ??
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If you’re reading this on-line and you would like to comment/expand on the above, or would just like to offer your thoughts on the subject of this posting, we encourage you to “Leave a Reply” at the bottom of this page, click on the feedback link at the top of the page, or send an email to the author of this posting. If you’ve received this posting as an email, click on the email link (above) to communicate with the author.

I was asked if one 501(c)(3) non-profit can give money to another 501(c)(3) charity. With the usual, and necessary, caveat of, “I am not attorney, nor am I giving legal advice,” I responded that, “Yes, when the transaction advances the donor non-profit’s charitable mission, a non-profit can donate money (and other resources) to another non-profit.”

In some instances doing so is an essential part of a non-profit carrying out its mission. Example: An orchestra could donate funds to an organization that seeks to develop overall marketing and PR education and outreach to that city’s arts and culture population.

Along with that necessary start to the process, the donor non-profit needs to make absolutely certain that there is:

1. No conflict of interest. Any person or persons responsible for the transfer of the donated funds must not personally (their families, friends, associates, etc.) benefit in any way. Example: The donated funds are used to purchase equipment in some way connected to business interests of a Board member of the donor non-profit

2. No violation of donor restrictions. While exacting restrictions are not generally connected to most donations, nevertheless, the risk is that some donors would not approve of their money, in principle, going to another charity they did not choose, no matter how it fits or how worthy.

3. No misuse of the donated charitable resources by the receiving non-profit. Should the receiving non-profit subsequently have publicized financial problems, even though the donated funds were not in fact misused, the overall perception of the receiving organization trumps the reality. Perception is everything. There could be serious trouble for the donor non-profit requiring it to justify its support of the ailing organization.

4. No question that donating funds in any way will imperil the donor non-profit’s own financial health. In other words, that the donation was not excessive, or beyond the realm of good judgment.

Of course, there are always exceptions, and at times such arrangements can be mutually beneficial. But, from what I have mostly come to know, the donation-to-another-charity question is most often asked by people who hope the answer is “No” because they are unhappy about, or uncomfortable with, a proposed action of this type. I know I would be as director of development, especially when challenges are possible by my donors asking that I explain the above point 2. I would not want to risk hearing, “Not with my money, you won’t!”
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If you have a question or comment for Tony, he can be reached at Tony@raise-funds.com. There is also a lot of good fundraising information on his website: Raise-Funds.com
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Have you seen The Fundraising Series of ebooks ??
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If you’re reading this on-line and you would like to comment/expand on the above, or would just like to offer your thoughts on the subject of this posting, we encourage you to “Leave a Reply” at the bottom of this page, click on the feedback link at the top of the page, or send an email to the author of this posting. If you’ve received this posting as an email, click on the email link (above) to communicate with the author.

As the year-end approaches, and since most non-profits use the calendar year for their tax returns, I wanted to highlight a few important aspects of a charity’s CFC application, and its financial management practices.

First, in terms of applying to the CFC, there are three size categories with different levels of financial reporting required. These size categories apply to all types of CFC charities: local, national, and international and are based on the financial size of the organization – with the requirements more stringent for larger non-profits.

The size categories are:
   •  Revenue greater than $250,000; an audit is required to be submitted
      with the CFC application.
   •  Revenue is less than $250,000 but more than $100,000. The charity
      must use the accrual accounting method and have an audit done
      annually by an independent CPA, but this is not submitted with the
      CFC application.
   •  Revenues less than $100,000, the non-profit must make financial information available in a timely manner, but accrual accounting is not required.

Full requirements for the 2013 CFC application are found at: opm.gov/cfc.
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§ Organizations with $250,000 or more in annual revenue, as reported on the IRS Form 990, are required to submit an annual audit of fiscal operations by an independent certified public accountant in accordance with Generally Accepted Auditing Standards (GAAS). The audited financial statements and IRS Form 990 must be prepared using the accrual method of accounting and cover the same fiscal period that ended not more than 18 months prior to January 2013 (i.e. ending on or after June 30, 2011).

Include as Attachment C a copy of the auditor’s report and the organization’s complete audited annual financial statements. The audited financial statements must include all statements and audit notes as required by GAAP. The Independent Auditor’s Report must include the signature of the auditor or the auditing firm.

The organization must certify that it accounts for its funds in accordance with Generally Accepted Accounting Principles (GAAP) and has an audit of its fiscal operations completed annually by an independent certified public accountant in accordance with GAAS.*

§ [For] Organizations with total revenue of at least $100,000 but less than $250,000: the certifying official must certify that the organization accounts for its funds in accordance with GAAP and has an audit of its fiscal operations completed annually by an independent certified public accountant in accordance with GAAS. The organization is not required to submit a copy of the audited financial statements with the CFC application. However, the information must be provided to OPM or the LFCC upon request.*

§ Organizations with total revenue of less than $100,000: the certifying official must certify the organization has controls in place to ensure funds are properly accounted for and it can provide accurate timely financial information to interested parties. It is not required to submit financial documentation with the CFC application or maintain its financial records in accordance with GAAP.

* Note that GAAP requires the use of the accrual method of accounting. No other basis of accounting is acceptable under GAAP. The cash basis, modified cash basis, modified accrual, and any other methods are not acceptable. (Emphasis added by author.)
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If your non-profit has been just under the $100,000 size and has now grown to above $100,000 it has two new requirements in terms of financial management:
      It will need to have an audit performed by an independent CPA and
      it will be required to use the accrual method of accounting.
It can be argued that this transition is more significant to an organization than at any other level, so it is important to plan for it, and budget for it.

All CFC Applications Require a Full/Complete 990 to be submitted, even if your non-profit (i.e., religious organizations) is not required to submit a 990 to the IRS or can use one of the shorter forms (990-EZ). The CFC application requires at least a pro-forma 990, signed by the authorizing official, as if it were to be submitted to the IRS. With modern tax preparation software, this is not usually hard to do, but more information is required for a complete 990, even if the full 990 is not submitted to the IRS. Just remember to have your tax-preparer prepare a pro-forma 990 in addition to the one required by the IRS.
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We’ll be taking a break until January 8th. All of us posting to the Fundraising Blog wish you and yours a healthy, happy….
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During his 25-year career in the Federal sector, Bill Huddleston, The CFC Coach, served in many CFC roles. If you want to participate in the Combined Federal Campaign, maximize your nonprofit’s CFC revenues, or just ask a few questions, contact … Bill Huddleston
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Have you seen The Fundraising Series of ebooks ??
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If you’re reading this on-line and you would like to comment/expand on the above, or would just like to offer your thoughts on the subject of this posting, we encourage you to “Leave a Reply” at the bottom of this page, click on the feedback link at the top of the page, or send an email to the author of this posting. If you’ve received this posting as an email, click on the email link (above) to communicate with the author.

There is a philosophy, widely subscribed to in the n-p sector, that views nonprofit start-ups as having a responsibility to the sector and to society to prove themselves viable before looking to raise funds from (too far) outside of the founding group.

Just because they may have a valid purpose, and may come to serve a real need in society, doesn’t mean that they are viable. The broader community should not be asked to fund a start-up until the founders have proven that the NPO can-and-will survive.

Many (most) foundations operate on the premise that there are too many needs and too many needy people to waste resources (money) on those NPOs that can’t survive.

Unless a new NPO has a “guarantee” of sufficient income from government support, fees-for-service and/or a huge endowment, there will, at some point, have to be a reliance on fundraising.

If a group of “founders” can’t or won’t (financially) support and get those people close to them to support their own organization, why would any individual or foundation want to risk their resources on an organization that’s not proved its viability?

There have been too many organizations where the “founders” have bragged about giving of their time, effort and heart; but they steadfastly refuse to commit their own funds.

That is the stage in the life cycle of an NPO where they are most likely to fail — where they (the founders) won’t give, but expect others to support what they consider important !!??

There’s no rule that says that every NPO has to survive, or should !! As “rich” as society might be, there are limited funds available for NPOs, and only those that prove themselves viable, should get some of society’s resources.

An NPO that cannot prove its viability (probably) shouldn’t be seeking broad support … and probably shouldn’t survive.
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Have a comment or a question about starting, evaluating or expanding your fundraising program? With over 30 years of counseling in major gifts, capital campaigns, bequest programs and the planning studies to precede these three, I’ll be pleased to answer your questions. Contact me at AskHank@Major-Capital-Giving.com
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Have you seen The Fundraising Series of ebooks ??
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If you’re reading this on-line and you would like to comment/expand on the above, or would just like to offer your thoughts on the subject of this posting, we encourage you to “Leave a Reply” at the bottom of this page, click on the feedback link at the top of the page, or send an email to the author of this posting. If you’ve received this posting as an email, click on the email link (above) to communicate with the author.

Once you have decided to apply for a federal grant, you must focus your nonprofit organization’s people and resources on the application process, which is likely to take at least a month. However, first you should determine whether you have all the requirements in place to apply.

This financial checklist will define (suggest) the steps you need to take before you can apply for a federal grant.

□  Is your organization incorporated?

□  Has the Internal Revenue Service classified your organization as a tax-exempt entity?

□  Has your Board of Directors formally decided that it is appropriate for you to seek and accept government grants?

□  Is your Board of Directors aware that you intend to apply for a specific federal grant?

□  Are your organization’s financial records audited annually by an independent outside public accountant? Was the most recent auditor’s report a “qualified” report?

□  Have you reviewed the grant guidelines to determine the financial requirements? Can your organization meet them?

□  Is there someone in your organization who can put together the financial components of the grant application – the budget and budget narrative?

□  Is your organization aware of current federal grant policies and procedures that relate to the use of government funds?

□  Do you have the organizational financial policies, procedures, and practices in place to use government grant funds legally and ethically?

□  Is your organization prepared to be audited by a federal agency before a grant is awarded or at the conclusion of the grant period?

There are two basic components of any federal grant. One is programmatic and the other is budgetary. Before you apply for a federal grant, you should ensure that you have the ability to properly manage and disperse federal grant funds.
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Dr. Jayme Sokolow, founder and president of The Development Source, Inc., helps nonprofit organizations develop successful proposals to government agencies. Contact Jayme Sokolow.
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Have you seen The Fundraising Series of ebooks ??
=-=-=-=-=-=-=-=-=-=-=-=-=-=
If you’re reading this on-line and you would like to comment/expand on the above, or would just like to offer your thoughts on the subject of this posting, we encourage you to “Leave a Reply” at the bottom of this page, click on the feedback link at the top of the page, or send an email to the author of this posting. If you’ve received this posting as an email, click on the email link (above) to communicate with the author.

It’s common, especially for new or small nonprofits, to combine the responsibilities for fundraising and marketing into the same Board committee — after all, both functions include “getting the word out.” That’s what they have in common. But they have much more that is not in common.

Part of a Fundraising Committee’s job is to ensure that the right words are customized to each appropriate funder — to one group of stakeholders. However, part of a Marketing Committee’s job is to ensure that the right words are customized to many different groups of stakeholders, e.g., current and future clients, collaborators, community leaders, suppliers, researchers, educators, etc. (Strong relationships with many stakeholders often results in more donations.)

Combining the two Committees often results in doing neither role very effectively. So to do Fundraising and Marketing very well, they should be done separately. Here’s why:

Responsibilities of a Good Marketing Committee

The Committee follows this general sequence during the year. It might seem like a lot at first, but it’s actually working smarter, rather than harder.

Responsibilities of a Good Development/Fundraising Committee

The Committee follows this general sequence during the year.

In my June 6, 2011 post, I introduced “A Four-Step Process for Effective Grantsmanship,” including: (1) prospecting for foundation funding, (2) cultivation, (3) grant proposal development, and (4) grant management and stewardship.

So far, I’ve provided a lot of introductory information on foundation and corporate grants, organizational readiness, grant management, and information on the first step in the four-step grantsmanship process: prospecting for foundation funding.

This is my first post on the third step in the process: Grant Proposal Development.

For those new to grantsmanship and grant writing, this step may be the most daunting. But it doesn’t have to be.

As I always tell my clients, grant writing is really about following the rules. Many private and corporate foundations publish grant guidelines, and they want all applicants to follow their guidelines… to the letter. Follow the guidelines, present your proposals in the appropriate and complete format, and include all required attachments.

A growing trend among grantmakers is the adoption of a common grant application. This allows applicants to prepare a single application for a number of potential funders. A list of common grant applications is provided online at the Foundation Center (http://foundationcenter.org/findfunders/cga.html). I have used the Missouri Common Grant Application (http://www.centerforgiving.org/MissouriCommonGrantApplication.aspx) and think it provides a good grant proposal template.

For foundations that don’t provide grant guidelines, I recommend using a common grant application format, like that provided by the Foundation Center, or the format below … that I have adapted from the Missouri Common Grant application:

Cover Letter – the cover letter is a great way to personalize your request. It is written from an individual (typically your NPO’s Executive Director) to an individual (typically the foundation manager or trustee). The cover letter can also include more qualitative and heart-felt information about your clients. I will write more about Cover Letters in an upcoming blog post.

Executive Summary – This is probably the most challenging section to write as it needs to succinctly summarize your NPO’s ask of the foundation, and often in only 100 – 200 words. I recommend writing this section last as you will have the best understanding of your complete proposal.

Contact Information – This is boilerplate information. I typically include name, address, phone and website of the NPO, as well as name, phone and e-mail address for the executive director and contact person for the proposal (if different from the ED).

General Organization Overview – More boilerplate information here. Include the mission and history of your organization, as well as a brief description of your major programs and accomplishments.

Stay tuned for Part 2, in my next post I will outline the following three sections of typical grant proposals: Program Description (this is the heart of your proposal), Financial Information, and Attachments.
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Lynn deLearie Consulting, LLC, helps nonprofit organizations develop, enhance and expand grants programs, and helps them secure funding from foundations and corporations. Contact Lynn deLearie.
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Have you seen The Fundraising Series of ebooks ??
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If you’re reading this on-line and you would like to comment/expand on the above, or would just like to offer your thoughts on the subject of this posting, we encourage you to “Leave a Reply” at the bottom of this page, click on the feedback link at the top of the page, or send an email to the author of this posting. If you’ve received this posting as an email, click on the email link (above) to communicate with the author.