Your Best Foundation Funder is not your Best Funder Forever

Business executives with their funder in a board room.

Just as grade school friendships don’t usually last forever, neither do relationships between nonprofit organizations and their foundation funders. Most grant makers don’t want to provide ongoing operating support; i.e. – they don’t want to be your BFF (Best Funder Forever).

Many foundations don’t make grants to the same organization every year. They may allow you to apply every other year, or every third year, and this is usually clearly spelled out in their guidelines. Here is a real example from the St. Louis Philanthropic Organization, “if you received grants in 2010 and 2011 (two consecutive years), you are not eligible to apply for funding this year.”

A good number of foundations will allow you to apply annually, but are less likely to fund your NPO in consecutive years. Often, this is not spelled out in their guidelines, so your relationship with a foundation trustee or its manager is important. Give them a call before applying and ask for their advice. They might hint at this, saying something about providing grants to NPOs across the community. They might even tell you directly.

A lot of foundations look to fund something innovative. They will provide “seed money” to launch a new project or program; but, once the program is up and running, they expect the nonprofit to fund its ongoing operation.

This funding priority will also usually be spelled out in their guidelines — as with the Allen & Josephine Green Foundation: “…seed money to launch a new project or program is a desirable type of grant.” A discussion with a trustee or foundation manager prior to submission can also provide that information.

And, if you have to pass up a grant one year because you don’t have a new project that needs funding, that’s OK. Don’t fall into the trap of designing a new project or program just to get grant money. For more information on this topic, see my post, “How To Better Manage Your Grant Program,” from February 2, 2012.

You also need to remember that the economic climate affects foundations. And, as foundations give 5% of their assets, typically calculated on a 3-year rolling average, increases in their giving will lag any economic recovery.

All these factors need to be taken into account when budgeting annual foundation income. And because the foundations that fund your NPO don’t want to be your BFF, you need to continuously prospect and cultivate new sources of foundation funding in order to maintain a steady income stream from this important revenue source.

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Lynn deLearie Consulting, LLC, helps nonprofit organizations develop, enhance and expand grant programs, and helps them secure funding from foundations and corporations. Contact Lynn deLearie..

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If 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.

Professional Fund Raiser vs. Fundraising Professional

A Professional Fund Raiser shaking hands with a Fundraising Professional

Last week I went off on “professional fund raisers,” and, in passing, referred to Fundraising Professionals. I think I made it clear that I was opposed to the use of the vast majority of those “professional fund raisers” who raise the money for you.

And, now, to clarify the differences between the two, and the reasons you should favor one over the other, I offer the following:

The, so called, “professional” fund raiser
• Has little, if any, background/training/experience in development
• Is interested in dollars, not people
• Usually gives the NPO an unethically-small percentage of the total dollars raised
• Has no commitment to establishing relationships between “donors” and the NPO
• Has no interest in helping the NPO create a donor base
• Doesn’t always provide the NPO with a list of who gave what amount
• Has no interest in helping the NPO create an ongoing funding stream – unless
       you hire them on an ongoing basis
• And, most States that require registration by fundraising consultants and professional
       fund raisers require (only) the latter to be bonded. Wonder why that is ??

Fundraising Professionals
• Have an understanding of the relationships that must exist between donor and NPO
• Have had mentoring and/or formal training in development
• Have broad experience in development
• Have developed expertise in one-or-more areas of the development process
• Work with you to create a constituency
• Work with you to create a donor base
• Work with you to create relationships between your donors and your NPO
• Work with you to establish realistic fundraising goals
• Who are employees of NPOs, work for a salary, never a commission/percentage
• Who are consultants, work for a fee (agree upon in advance, but not paid in advance)
       based on services/expertise to be provided, never a commission/percentage

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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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If 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.

Plan and Organize Your Proposal before You Write

A person working on a business proposal with their laptop

Government grant proposals should go through a five-step writing process:

  • Plan: Think through your proposal sections.
  • 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.

This posting, part one in a series, will discuss the first two steps:

PLANNING YOUR GOV’T GRANT PROPOSAL

Proposal writers should take three simple-but-effective steps to plan their writing assignments: (1) define common terms – the government agency’s terms and your own; (2) use a planning worksheet to outline your sections; and (3) seek feedback early in the process.

Define common terms

  • What are the features (details) of your service?
  • What are the benefits of your service?
  • What benefits are important to the evaluators?

Develop a planning worksheet

Your planning worksheet should help you identify the government agency’s main issues, your solution, your experience and your performance.

Seek feedback early

Remember, you are part of a team! Use your colleagues to review your planning sheet and suggest improvements. This can be accomplished at a brainstorming session or through an individual review of your worksheet.

If your planning process has gone well, every one of the proposal writers should have a detailed planning worksheet before they begin writing. Please note the emphasis on the word “before.”

Too many proposals are written prematurely before the proposal team has carefully thought through what they are planning to present. If you write before you plan, you are very unlikely to develop a competitive proposal.

Resist the very human urge to start writing once you have read the grant guidelines. Step away from the computer keyboard! You must have a substantive outline before you write, and that can only be done through careful planning.

ORGANIZING YOUR GOV’T GRANT PROPOSAL

Proposal writers should take three simple but effective steps to organize their writing assignments: (1) follow the fundamentals of persuasive organization; (2) organize as instructed; and (3) organize around government agency’s hot buttons.

Follow the fundamentals of persuasive organization

  • Present information according to the government agency’s needs. Focus on providing a solution to the agency’s problem, listing benefits and evidence/proof.
  • Group similar ideas together.
  • Place the most important information first.
  • Keep introductions short.
  • Use headings to guide evaluators.

Organize as instructed

Follow the grant guidelines carefully when organizing your proposal narrative. Do not create your own outline – follow the grant guidelines literally.

Organize around the customer/evaluator hot buttons

  • Acknowledge the government agency’s vision, challenges, objectives, and requirements.
  • Establish and prioritize the government agency’s needs and desired outcomes (hot buttons).
  • Present details of your solution in the same order as your prioritization of the government agency’s needs and desired outcomes. Emphasize the benefits to the government of your solution and provide proof that your solution is very likely to work.

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Dr. Jayme Sokolow, founder and president of The Development Source, Inc.,
helps nonprofit organizations develop successful proposals to government agencies. <a href=”mailto:JSoko12481@aol.com”>Contact Jayme Sokolow</a>.

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<strong>If 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.</strong>

Professional Fund Raisers & Up Front Fees

Two fundraisers discussing an up-front- fee

A note from a reader:
Hank, I am a volunteer for a nonprofit organization that has been approached by “professional fund raisers” that are looking for “up-front” fees to raise money for us.

In my experience, and I have paid out thousands of dollars to these individuals that promise you the moon and when it comes time to deliver … the excuses abound.

The professional fundraisers say it is unethical to pay a percentage on the money raised. Is it not unethical to take money from a non profit and not deliver?
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My immediate reaction to the phrase “professional fund raiser” is one of anger and disgust — feelings that are directed at both the “fund raisers” and those who hire them.

It’s okay for an organization to hire a fundraising professional to work with them to create/implement/maintain a productive, cost-effective fundraising program. It is an extremely bad idea for NPOs to hire outsiders to raise money for them.

No outsider can speak with the conviction and passion for an organization’s mission as can board members, staff, volunteers and the people served by the NPO.

Outsiders, if they are asking people for money on a face-to-face basis, can, of course, fake it. So the organization has to decide if that’s who they are … people that hire others to “fake it.”

If outsiders are raising the money, two questions that must be asked are: (1) how much of the money that is raised will actually get to the NPO; and, (2) will the people giving the money or paying to attend an event be informed, as is their right, of how much of their money will go in the “professional’s” pocket and how much to the nonprofit ??

Also, the “fund raiser’s” fee should be agreed upon in advance – based on the time and effort needed to make it happen (not based on dollar goals or dollars raised), and included in a contract that specifies what services will be provided in what timeframe.

No “fund raiser” should have their full fee paid up-front. That’s just bad business, and you’d certainly not want your donors to know that you do that.

If those “professional fund raisers” can guarantee that “X” dollars can/will be raised, then they should have no problem putting that guarantee in a contract. The NPO will then have recourse (with State support) if the goal is not met !!

And, FYI, most States have an office (usually the Secretary of State) that oversees and regulates fundraising, and many require that copies of contracts with “fund raisers” be provided to the State for approval. Many also publish lists of “professional fund raising” companies and their track records in their States.

There are a few “professional fund raisers” that operate ethically, that raise money at a fairly low cost-per-dollar-raised, but the majority of the firms that I’ve seen listed on State reports forward too little of the money raised to the NPOs; and, high fundraising costs raise ethical questions, and suggest that the nonprofit is poorly managed.

Too many nonprofits are created by well-meaning people who have no clue about what’s involved in running/maintaining an organization; and, nonprofit organizations with leaders who won’t take the time to learn what they should be doing, and then won’t do what they should, should probably not survive. Hiring an outside “fund raiser” is the often leadership’s way of not having to do what nonprofit leaders are supposed to do.

As to the last two points in the email….
• You can’t lose money on a fundraising professional. You can ignore their good
    advice/direction, but you will have gotten value for the fee you paid.
• If a nonprofit is paying a “fund raiser” in advance, it’s the organization, as much as it is
    the “fund raiser,” that is acting unethically.
• Taking money without delivering what was promised sounds to me like “fraud.”
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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 Hank@Major-Capital-Giving.com
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If 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.

Mobile Fundraising: Practical Advice

A person raising funds with a smartphone

After some $40 million was raised in $10 gifts through cell phones for the Haiti earthquake response in January, 2010, every nonprofit had dreams of cell phones as mobile donation machines. Even for the Red Cross, those dreams seem to have evaporated.

However, mobile use among Americans has increased dramatically. It’s probably true that among the most passionate, most connected, most generous and successful Americans, smartphone use is even more ubiquitous. What are the implications for nonprofits, most of whom haven’t mastered the internet yet? Here are some thoughts gathered at the Direct Marketing Association’s recent Mobile Marketing Day:

  • Text-to-give is NOT a significant part of fundraising.
  • Most smartphone users view much of their email on their phones, so make sure your email messages will render nicely on Apple and Android devices.
  • Every page on your website should be optimized for mobile browsers; otherwise, if donors click once and get garbage, they’re not likely to click again from their cell phones.
  • Mobile is ideal for getting special event attendees to connect with you in a way that will let you continue the conversation after the event.
  • QR codes let mobile users connect with you after seeing something in print, either at an event, in a publication, or on outdoor or transit media, even your direct mail letter.
  • Ask for mobile numbers (but don’t require it) on your donation form and newsletter signup form. If you can associate numbers with donors, you can track the impact of mobile communications, and you can reach out to donors via phone when their mail and email start bouncing.
  • Mobile users can give via their credit cards on a mobile-optimized donation form. Those gifts tend to be as much as 30% smaller than web page gifts sent from a laptop or desktop computer (but that means they’re 70% larger than the gift you wouldn’t get without such a page)
  • One organization indicated that up to ten percent of cell phone area codes do not match up with the supporter’s zip code, meaning that many people keep their old cell number even when they move.
  • If you believe in the future of mobile communications, get your own short code — the 5-digit numbers to which you can send a text message instead of having to enter a full 10-digit phone number. Don’t settle for a shared short code.
  • Apps are expensive and generally not productive unless you have killer content (think National Geographic).

Since the future of mobile is growing, it pays to recognize its potential for your organization, choose one area where you think mobile can be effective for your organization and get started. Your learning curve can match up with the growth of this channel.

More questions about mobile fundraising? Send me an email!

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Rick Christ has been helping nonprofit organizations use the internet for fundraising, communications and advocacy since 2009, and has been a frequent writer on the subject. He delights in your questions and arguments. Please contact him at: RChrist@Amergent.com or at his LinkedIn Page

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If 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.

“Philanthropy,” An Often Misused Term

philanthropist discussing business fundraising

I have a BIG problem with the word/concept of “philanthropy” as it is often misused in the nonprofit/fundraising world.

Too often, people in the nonprofit sector equate the terms fundraising, development, charity and contributions with the concept of philanthropy. They are not synonymous.

Philanthropy, in its literal definition, refers to “love of mankind/humankind. In the broad context of fundraising, it relates to giving that is motivated (primarily) by the desire to help others.

In last Tuesday’s posting, “When I Forgot the Meaning of Philanthropy,” Tony Poderis related a good example of where real philanthropy comes from – that some people’s “desperate need to receive was the perfect balance for [his] need to give.” Truly, in the end, his was an example of philanthropy, of his desire/need to help others.

The thing is, and my focus here is on the definition and use of the word “philanthropy,” not everyone gives for philanthropic reasons. For the most part, people aren’t giving out of their love of humankind. That doesn’t mean that people are not giving to help other people, it just means that many are giving to (primarily) satisfy their own needs.

“People give because giving (in some way) makes them feel good.” I can’t imagine a person making a gift and not getting some good feeling from the act.

Whether a donation is made because the donor wants to be (or feel as if) s/he is part of a particular group, because s/he was brought up to believe that you’re supposed to give, because it looks good to the community, because the solicitor is someone that s/he cannot refuse (for whatever reason), to get one’s name on a donor list or a plaque, or for whatever other reason a person might have for giving, not every gift is philanthropically motivated.

Indeed, giving tends to be an activity/action that makes the donor feel good. Even s/he who gives grudgingly, in the end … and for whatever reason, feels good about giving.

My point, with this exercise, is to emphasize for folks at nonprofit organizations that if you want people to give you their money, you must know/understand what motivates your potential donor.

That a nonprofit does wonderful things and helps lots of people may not be the reason that every current and former donor has made their gift, and it may not be the reason that they and others give in the future.

For those who give to causes/organizations like yours for philanthropic reasons, an appeal on that basis is usually sufficient. For those who are motivated by other reasons, you need to appeal to them based on what will make them want to give … and that may not have anything to do with how wonderful your organization might be.

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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 Hank@Major-Capital-Giving.com

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If 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.

The CFC: Leveraging National Volunteer Week – April 15-21, 2012

A volunteer fundsraising

In the 7 Keys to CFC Success, Key #3 is “Use all 12 months of the Year.” By the time you get to the actual CFC solicitation period in the fall, you’ll need to have already planted the seeds of awareness in the minds of your current and potential new donors.

Communication and marketing professionals will tell you that a person needs to have had at least seven “touches” (meaning any type of communication, including letters, ads, conversations, etc.) with an organization before they will act — whether to donate, volunteer, or make a purchase.

One program that provides multiple communication possibilities for many non-profits is the “National Volunteer Week” program that is sponsored by the Points of Light Institute. It began in 1974 and has grown significantly over the years, and the Points of Light network now includes more than 70,000 organizations.

The Institute provides many free resources to non-profits about the many aspects of National Volunteer week, including a free resource guide … that is available at: Resource Guide

As stated in that guide:
National Volunteer Week, April 15-21, 2012 is about inspiring, recognizing
and encouraging people to seek out imaginative ways to engage in their
communities. … you can leverage this brief window of national opportunity
to advance your individual cause and promote volunteer commitment in
your community.

I added the emphasis (bold-face) to the above to help you understand how important it is for your non-profit to benefit from this type of opportunity. This is just one example of the types of leverage available to non-profits, but it’s an extremely important one – don’t let it slip through your fingers !!

Volunteer Appreciation – Events

Many non-profits hold their own volunteer recognition efforts during the month of April, and as they are recognizing their program volunteers, it’s a very easy and simple step to add recognition of your own fundraising volunteers, as well as of the federal employees who are CFC volunteers each fall. The most basic tenet of all successful fundraising is to say “Thank you,” but many non-profits do not take advantage of all the opportunities to publicly thank all of their supporters.

Volunteer Appreciation – Press Releases and other Media

In addition to live events for recognizing volunteers, one of the important tools that non-profits should use are the Internet based media release sites. You have a compelling story to tell, (or else you wouldn’t exist), use the fact that because of the visibility of National Volunteer week, many media outlets are looking for stories to tell about non-profits in their community.

In addition to thanking the volunteers, and certainly if your organization has one or more “Volunteers of the Year” they will appreciate the coverage. Be sure to thank your fundraising volunteers … and the CFC campaign volunteers.

One of the important success tips in using Internet based press release services is to use accurate keywords for your organization, and you can end up being surprised by which media outlets are interested in your story.

In 2011, the Friends of Frying Pan Farm Park (a community park in Fairfax County, VA) thanked their supporters as part of National Volunteer Week, and mentioned some of their upcoming programs. A few days later a reporter from the Voice of America called.

No one would have predicted that result, and it shows how media has changed — use the right keywords for your organization, and the media will find you. You no longer have to find them.

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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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If 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.

When I Forgot the Meaning of Philanthropy

In giving you receive

Recently, during a meeting at our Church, I talked to Alice, our pastoral associate, about my wife Joyce and I offering to give a special major contribution for a program she heads.

Alice is in charge of a group who regularly review the cases of fellow parishioners in desperate need of money to pay overdue bills for household utilities, rent, mortgage, medical expenses, and other critical needs.

I have a long history of assessing and evaluating the financial “sustainability” of non-profit organizations and know it to be one of the key factors that grant-making organizations and donors use in deciding whether or not to contribute.

While most solicitations of donors are made without the presentation of spreadsheets and statements, we know that numbers usually do count, and that at the very least we better be ready to produce them when requested.

Thus, I found myself carrying forth those lessons learned from my non-profit evaluation experience when I began asking Alice questions at length about the designated recipients of our proposed donation.

I probed the “worthiness” of those in need of the generosity of our gift. I asked:
• What degree of research goes into the amounts requested?
• How sure is the church that the beneficiaries will use the money for the purpose for which
it is given?
• Will the recipients do their best to get on their feet so that further assistance isn’t needed?

In the middle of my questioning, I suddenly stopped and began to silently ask myself:
• Had I completely forgotten what philanthropy is?
• Where had my belief in charity gone?
• Had I lost my understanding of the humanitarian intent of my gift by encumbering it with
strings of implied “accountability?”
• Was I making units of measurement more important than an act of compassion?

As I struggled with those thoughts I realized that something even worse was in danger of happening. I was inadvertently dismissing and diminishing the good work that Alice and her committee were doing to address the very issues I was laboring over.

Shortly after arriving home from Church, a thought came, no doubt inspired from that sacred setting where I talked to Alice. I remembered what the apostle Paul wrote: “God loves a cheerful giver,” and that reconnected me to what our gift was really about.

I had been completely unaware that my searching, and to a degree intrusive, questioning of Alice was the reverse of the thoughts and actions of a cheerful giver.

My concerns were too much about my desire to know who was getting the money, how much they were getting, and whether they really deserve it. I had momentarily lost my understanding of the spirit of giving. I had become a “grim giver.”

I realize taking the “cheerful-giver” attitude too far can cause us to overlook the rational path we usually want our money to travel. But, there are times when we do not need to fret about our “return on investment.” There are times when we don’t need to wrap our giving in hard logic.

For me, this was one of those times. Temporarily, I had forgotten, that our parishioners’ desperate need to receive was the perfect balance for my need to give.
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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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If 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.

Your Grantsmanship Team: Who’s on First?

A Grantsmanship Team

If you’re the only staff person devoted to grantsmanship at your organization, then you’re the one on first … and you’re also the manager! But, you have a great team, and each member plays an important role in helping to win the grant. As in baseball, each member of your team has specific responsibilities and a specific skill set that relates to the responsibilities of their position.

So, here’s the team roster:

  • Manager: As the manager, you’re responsible for winning the grant. This means that you’re responsible for the four steps I have discussed earlier in this series: grant prospecting, grant cultivating, grant/proposal development, and grant management, including reporting and stewardship. As the manager, you also need to keep abreast of changing rules, techniques, technologies, and philosophies relevant to grantsmanship.
  • First Baseman: In this position you need to receive information from all your other fielders.
  • The Infield: The program staff members are your infielders, and they cover a lot of ground delivering services to your clients. When it comes to the programs you need to describe in grant proposals, they are the experts, and are invaluable members of your team. You must work closely with them to establish program goals, objectives, and metrics, and you need their help with monitoring outcomes and reporting results.
  • The Pitcher: Your Executive Director and board members will, fairly often, make the pitch to a foundation trustee. The pitch can be in the form of a meeting to discuss the possibility of applying for grant funding, at a site visit that you have arranged, or even a phone call. Your board members’ connections in the community, and their ability to cultivate these relationships, are the specific skills that make them excellent pitchers for your organization. And in this capacity, they often function as talent scouts, helping you prospect for other sources of grant funding.
  • The Catcher: Foundation trustees, program officers and/or the foundation manager are on the receiving end of your grant pitch. And, although not members of your nonprofit organization, they are very important members of your grant team. They can provide valuable information about the funding priorities of their foundation, and specifics on proposal format and due date. Most important, if they have caught a good pitch, they can be advocates for your proposal with the other trustees at their foundation.
  • The Outfield: Other members of the development staff and the finance staff at your nonprofit round out your fielding positions. Other development staffers can assist with proposal review, and finance staff will provide budget information for proposals, and budget “actuals” for reports.
  • The Competition: Just as Tony La Russa kept an eye on the Texas Rangers during the 2011 World Series, you also need to keep an eye on your competition. Review the annual reports of other organizations that provide the same or similar services as your organization, and identify the foundations listed as their funders. Foundations that fund these organizations are likely to be good prospects for you.
  • Coaching Staff: As in baseball, coaches can assist in the smooth functioning of your team. Attend professional development seminars, network with other grant professionals, and seek out a mentor if you are new to the profession.

If you manage your team well, by understanding the importance of all your players and communicating with them about the roles they play in your organization’s grant program, then you may end up rivaling Tony La Russa’s winning record… and yes, I am from St. Louis!

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Lynn deLearie Consulting, LLC, helps nonprofit organizations develop, enhance and expand grant programs, and helps them secure funding from foundations and corporations. Contact Lynn deLearie..

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If 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.

A New Nonprofit, A New Board, and The Grants Process

An executive board meeting

A reader wrote:
We are a new non-profit, with a mission to promote health and wellness. We will likely be able to obtain a BCBS grant, but we’re now hearing that we must get board approval prior to its writing so that the board can approve the budget. Is this common practice?


Our response:
The board has authority/responsibility for all fiscal matters, and must approve the organizational budget.

Since it is a fiscal and policy matter, the board must agree to the submission of all grant proposals. They can examine/decide on every proposal, give blanket approval for categories of proposals, or they can be somewhere in between.

Most foundations require/expect/assume that the NPO’s board agrees to what is being committed to by the organization. The assumption is also that the board will accept responsibility for the proper use of the funds and the follow up reporting.

A board, in making policy, must decide whether it will oversee the implementation of all aspects of the program/activity to be financed by a grant (very unusual), or if they will leave that oversight to the executive director (usual). In any case, the board should require that the executive director provide periodic fiscal reports.

A follow up question from the reader:
We’re currently working on writing the BC/BS grant proposal, but we did submit five others previously. Main issues are that there is no policy in place or listed in the by-laws, each board member is trying to state what we should do, and the grant application is due this Friday.

We responded
Individual Board Members, unless specifically given the authority by the board (as noted in the board minutes), have no say about the structure/elements of a grant proposal. Only the Board has grant approval authority … and the board minutes must reflect their approval.

Without that, staff members would be taking “unauthorized” action and would become legally responsible for any claims the grantor might make !!

I can’t conceive of any grantor, especially one the size of BC/BS, accepting a proposal that wasn’t approved by the board of an organization requesting funding.

Be Careful !!

The reader’s final comments:
As said, it’s a green board and they need money, but there are some internal struggles. They’ve just hired a CEO, who wouldn’t be the program coordinator, as she doesn’t have the skill set. There is so much bickering, and the grant is still in proposal-writing mode. Now I understand why so many nonprofit employees just go to work, then go home, and “don’t want to get involved.”

My wording was intended to indicate that the CEO could oversee the financial aspects of a grant-funded program and/or the implementation of such a program. That, too, is up to the board.

What you’ve described sounds very much like so many other new NPOs.

And, a final observation: There may be many employees of (disorganized/unorganized) nonprofits who “don’t want to get involved,” but the majority of NPO staff members have a connection, a commitment, to their organization’s mission and the people being served.

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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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