Category: Financing & Loans

Before you apply for a federal grant, you should determine whether your organization has the financial capability to use federal funds properly.

A Financial Checklist…
…to help you determine whether or not you are ready to apply for a federal grant.

□ Has the IRS classified your organization as a tax-exempt entity? To apply for many federal grants, you must be an IRS tax-exempt organization. Most NPOs are 501(c)(3) organizations under the IRS tax code, but other kinds of NPOs can apply for grants too.

□ Are your organization’s financial records audited annually by an independent outside public accountant? A federal agency may require your NPO to produce a “non-qualified” audit report to receive a grant award. This means that there were no financial issues and that all accounting standards were properly observed.

□ Can you meet the financial requirements? Before you apply, you should carefully study the grant guidelines to determine that your NPO can meet all financial requirements. For example, one typical grant requirement is the periodic submission of detailed financial reports.

□ Do you have the organizational financial policies, procedures, and practices in place to use grant funds properly? Once you receive a grant, you will be expected to (1) disperse grant funds according to your application budget; and (2) account for them according to accepted accounting procedures. For example, one important financial practice would be the ability of your NPO to identify and track all grant expenditures.

□ Is your nonprofit ready to be audited by a federal agency? As a condition of award, a government agency may decide to do a pre-award audit to determine whether your NPO can manage a grant … while adhering to accepted accounting standards.

You also may be audited at the conclusion of your grant to determine whether your organization has spent its grant funds properly – i.e., only on those items/activities that were in the budget you submitted with your application, or were approved subsequent to that submission by the granting agency.

Determine your Financial Capability Now
If you can answer all these questions positively, you are financially ready to apply for a federal grant. If any of your answers are negative, address your problems before you apply for a federal grant.

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Dr. Jayme Sokolow, founder and president of The Development Source, Inc. helps nonprofit organizations develop proposals to government agencies, foundations, and corporations. He can be contacted at Jayme Sokolow.

A key problem for many new nonprofits is that most of their founders, that “small number of caring people who want to help,” have the impression that fundraising has to do with “fundraisers” — special events or sales: dinners, circuses, golf tournaments, T-shirts, cookies or candy.

That couldn’t be farther from reality. While those activities seem to produce “quick” money, they don’t help you create a constituency that cares about your success and your long-term survival. Fundraisers and sales attract people looking to be entertained or who really like those thin-mint cookies.

Corporations and foundations are perceived as major sources of funding, so most people new to the non-profit community look to them for support. But, only 12% of funding for NPOs comes from those two sources, combined.

The truth is that corporations will usually provide substantial gifts only if they can benefit/profit by a relationship with your organization; and, most foundations will only support you for a limited time — they don’t want to adopt you, just help you get something started that can-and-will become self sustaining. And, self-sustaining means having ongoing, reliable sources of long-term funding.

Over 80% of funds raised by non-profit organizations come from individual donors or their estates – gifts solicited by various methods, often on a face-to-face basis by volunteers … including founders and other board members.

The traditional methods of ongoing fundraising include direct mail and/or telephone, often supported by email. The majority of funds (roughly 60-65% of all dollars) contributed to nonprofit organizations are in the form of major gifts from individuals.

Successful long-term fundraising, therefore, means creating a plan to identify, educate, cultivate and involve prospective (major) donors with your organization. It also means that, somewhere along the way, you’re going to have to ask them for the gift. “If you don’t ask, you don’t get.”

Non-profit organizations are important, often essential elements of a community, and they provide valuable, and often vital services to people in great need. Creating and operating an NPO must, therefore, be a serious undertaking – with strategic and development plans to ensure long-term survival. When needed, seek expertise and specialized knowledge — accountants, attorneys, consultants….

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Have a comment or a question about starting, evaluating or expanding your fundraising program, your major gifts fundraising program or a capital campaign? Email me at AskHank@Major-Capital-Giving.com. With over 30 years of counseling in major gifts, capital campaigns, bequest programs and the planning studies to precede these three, we’ll likely be able to answer your questions.

Email is a very measurable tool, and it’s important that you measure your results so you can report on the effectiveness of your email program. In this post, I’ll suggest the most meaningful metrics for you to view your email program’s success as a whole. I like to measure this and report it on a monthly basis. In the previous post, I showed you how to examine an individual message’s results against previous emails.

Number of Subscribers: You should have a plan in place to attract new subscribers to your email messages, and so you should be building your subscriber base each month. You probably need to grow at a rate of 1% each month just to maintain the same number of subscribers, because about that percentage of readers change email addresses or unsubscribe (about 20% per year)

Delivery Rate: Most inexpensive email tools do not automatically mark an email address as “undeliverable” after a set number of bounces or failed attempts. It’s of no use to anyone to build up a file of bad email addresses. Remove undeliverable addresses from your file quarterly if you’re paying for your tool based on the number of email addresses in your file. If there are spikes in your undeliverable rate, it may represent a technical problem with the tool you are using.

Don’t believe that “Sent – Bounced = Delivered.” The “delivered” quantity in your email report is the quantity of emails that your email tool delivered to the internet service providers of your subscribers. Unlike the post office, which delivers each piece of mail to each household, no matter how irrelevant, internet service providers regularly discard many emails that they think might be spam. They don’t tell the sender, nor the intended recipient. Some internet service providers (Yahoo!, AOL, Gmail) put some email messages in a “Spam” or “Junk Mail” folder based on their content. Microsoft Outlook does that as well. Many users don’t ever look in those folders. You need to test your email using spam scoring tools to reduce the “spam score” of your emails.

Unsubscribe Rate: Generally individual email messages result in less than 1% of readers choosing to unsubscribe. Look at how your rate is fluctuating over time. If your rate is increasing, perhaps people are no longer feeling your content is relevant or interesting. Too many emails isn’t the problem; too many uninteresting emails is the problem. If all of your email messages are donation appeals, people will just delete them politely from their inbox, and after awhile they’ll decide to unsubscribe to reduce their need to delete them. You need to vary the messaging and subject lines in order to keep their interest high.

Questions about how to measure your email results? Or, how to improve your results? Ask Me.
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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

Non-profit organizations (NPOs) exist to provide services that would not otherwise be available to many in the community. Too many NPOs fail to survive, however, because the people responsible for their creation aren’t fully aware of what it takes to effectively provide for the needs of the community.

Non-profits are usually created by a relatively small number of caring people who “want to help.” The majority of those people have little more than their good intentions to sustain them, and they create their NPOs without many of the “tools” that would help them tip the odds in favor of long-term survival.

Success requires a strategic plan that defines the organization’s mission, direction and future, a plan that details all the activities necessary for the NPO to pursue its mission, and the funding needed to support those activities;

Success requires a development plan that defines the appropriate fund raising activities for satisfying those funding needs; and,

Success requires a leadership committed to doing whatever is required to ensure that the people who need the services of the organization can get those services.

Since you can’t be everything to everyone instantly, you have to begin somewhere. The first step in the process, therefore, is to realistically define the extent of the services you want to provide, to whom, and in what timeframe.

You must then identify what supplies, equipment and personnel you will need, and in what timeframe; whether all work and services will be provided by volunteers and/or paid staff; where those people will come from; what experience/training they will need; and, what all of that will cost.

Once you’ve identified what it will cost, the next step is to identify sources of income.

Will you charge a fee for your services, or will you have to “raise” the money? Unless you know that the need you are satisfying is of a short-term nature, you must be sure that your funding sources will be there over the long-term. And, so you can track your progress and tweak your plans accordingly, definitive goals are essential.

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Have a comment or a question about starting, evaluating or expanding your fundraising program, your major gifts fundraising program or a capital campaign? Email me at AskHank@Major-Capital-Giving.com. With over 30 years of counseling in major gifts, capital campaigns, bequest programs and the planning studies to precede these three, we’ll likely be able to answer your questions.

In many organizations, the announcement of a future event moves staff to wave their hands and raise their voices, saying that, “I want to help, I love events.”

The theme and the goals and objectives of an event are (often) determined by the organization’s development team – the event being part of their annual fundraising plan. Those determinations, and most of the planning, frequently include the E.D. and a consultant who specializes in event design, management and production.

The planning process takes months of discussion and decision-making before any public announcement that an event is planned and scheduled for a particular date.

During the planning period, a wise development team confers/collaborates with their colleagues in other departments within the organization, especially with the folks in communications/media … who will most likely be asked to help draft copy for an event program, and plan a media strategy to help promote the event.

Additionally, it helps to get early buy-in by all staff, so they feel they have been heard, and to include the valuable insights they might have. Someone in the organization’s program department may have some creative thoughts on who to involve in the event; and, the simple task of reviewing lists should be on everyone’s to-do list, regardless of their department.

There is always a chance that a staff member could know someone who would be interested in attending the event … or even sponsoring it. This information can be important, not only to the development team, but to the success of the event.

Do not minimize the contribution of some of the support staff … who should not be viewed as envelope stuffers but as part of the team. Turn the stuffing into an office party, supply lunch or snacks and get everyone together in the conference room … including the development team. The stuffing will go much faster if no one feels like “they had to do all the grunt work,” while the development team sits around eating bonbons !!

Many of our client organizations invite the staff to attend the event and “help out.” A list of tasks is passed around to the staff asking if they would like to volunteer for a particular role.

Everyone knows that the “work” takes place before the event begins (for a 6 pm reception, staff helpers should arrive at 4:30pm). And, once they’ve helped get things ready, those volunteers are able to relax and enjoy the event.

No staff person should be forced to attend and participate, but with the right environment/motivation, most staff members will want to participate. When they do, they benefit, the organization benefits, and attendees benefit by getting to meet staff members in a social setting.

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Have a comment or a question about creating or expanding your special event? Email me at Info@NatalieShear.com. With over 30 years in conference and event planning, we can help you turn your vision into reality.
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Have you seen Natalie’s ebook on Special Events ??

… So We’d better Find A Consultant in Our Area.

There is a myth about hiring campaign counsel that, in essence, says that you should hire someone from your area because they will know the area and all the people, and will be better able to point you at the right prospective leaders and donors. That’s very wrong, for two reasons:

1.  Any consultant who has worked with other organizations in your area
    is ethically bound to keep confidential any information s/he may have
    gathered (in the course of working with those organizations) about the
    leaders of and donors to their campaigns.

    That information belongs to the organization that hired the consultant.
    It’s not his/hers to share. After all, you wouldn’t want that consultant
    to go on to his/her next gig and tell them all about your donors!!

2.  You hire a consultant for his/her expertise, knowledge and experience –
    someone who can guide you through a process, not give you all the
    answers. Besides, there are no consultants who can give you all the
    answers … every campaign is different.

    It’s because of those differences that you need a consultant whose
    expertise and experience can guide you through the process. It’s not
    whom s/he knows in your community or what s/he knows about your
    community … it’s his/her expertise, flexibility, creativity and ability
    to work with you and your constituents that will make the difference.

Of course, if your organization is located in a major city there will be many consultants and consulting firms, and many (prospective) major donors. That will make it more likely that you can find counsel that would not find him-/herself in a position of conflict of interest.

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Have a comment or a question about starting, evaluating or expanding your fundraising program? Email me at AskHank@Major-Capital-Giving.com. With over 30 years of counseling in major gifts, capital campaigns, bequest programs and the planning studies to precede these three, we’ll likely be able to answer your questions.

Once you have identified a promising federal grant opportunity, and before you invest the “usual” time and energy, you should first determine if this federal opportunity is for you…or not !!

The Five Basic Questions
Once you have carefully studied the grant guidelines, you should be able to address the following:

1. Are you eligible? In the section on “Eligible Applicants” are the parameters
    for who can apply. Some federal grant programs are restricted to specific
    states or certain kinds of organizations.

2. What is the deadline? The section labelled “Deadline for Transmittal of
    Applications” will make it pretty clear if you have enough time to develop a
    great application. You will need at least a month to develop a highly
    competitive application.

3. What is the award size? Look in the section on “Estimated Average Award
    Size.” You should know your total project cost and compare that number to
    the size of the grant award. There is an economy of scale in developing
    federal proposals. Requesting a small amount of grant funds may be almost
    as time-consuming as requesting 10 times that amount.

4. What are your chances of receiving an award? This info is in the
    “Estimated Number of Awards” section. If the federal program is
    only going to award a few grants, you should consider not applying …
    because the competition is going to be very fierce. Better to focus
    on federal grant programs where the mathematical odds are more in
    your favor.

5. Is my project directly related to the grant guidelines? Look at the
    description of the grant program. Does your organization have the same
    mission as the grant program? Will your grant application directly address
    the goals and objectives of the grant program? If the answer to both
    questions is yes, than this grant program may be for you.

Just Say No
If you do your homework, you will uncover many potential federal grant opportunities. You should not, however, even think about applying to all of them. After a while, when you’ve developed a good process for reviewing
those federal grant opportunities, you will find yourself deciding not to
bid on most of them.

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Dr. Jayme Sokolow, founder and president of The Development Source, Inc. helps nonprofit organizations develop proposals to government agencies, foundations, and corporations. He can be contacted at Jayme Sokolow.

Email is a very measurable tool, and it’s important that you measure your results so you can report on the effectiveness of your email program. In this post, I’ll suggest the most meaningful metrics for you to examine an individual message’s results against previous emails. In the next post, I’ll show you how to view your email program’s success as a whole.

Any decent email tool will provide you with more measurements than you have time to evaluate. The measurements are not consistently named or even measured across different tools, so I’m going to give you what I have found the most useful over the past 11 years.

Open Rate: The open rate of an email measures the effectiveness of the time of day and day of week that your email was sent, as well as the “From” name and email address, the subject line and sometimes the first lines of your copy. That’s all someone can see without opening your email. The open rate is calculated by the number of emails opened, divided by the number of emails that were successfully delivered (don’t count emails that bounced). Good email open rates run about 20%

Click-Through Rate: The layout and content of the email determine whether or not people will click the links in the email. Divide the number of email messages that are clicked into the number of emails that were opened to get this ratio (a good email click-through rate is 30% but varies widely depending on what you’re asking the reader to do). Don’t measure click-through based on the number of emails that are delivered. If you do, you’re taking into account all of those factors that go into determining open rate. An email with a terrible subject line but great content will look like a bad email if you base your click-through rate on the number of emails delivered. People can’t click if they don’t open the email, so only count the email messages delivered. Count only unique clicks per recipient; if someone clicks every link in your email, or clicks the same link several times, only count them once.

Completion Rate: Once people click a link in your email, presumably you want them to do something on the web page (sign a petition, make a donation, etc.). So count the number of completed donations or petition signatures as a percentage of the emails that were clicked. To do this, you probably need to create a unique landing page just for this email, so that other web traffic doesn’t distort your results. 20% completion on a donation page is about average; I’ve seen completion rates of 100% or more on a petition (respondents complete it, then get their spouses or friends to complete it too).

Example: You sent 10,000 email messages, and 9,000 were delivered, 2000 opened, and 500 of them resulted in a click to a donation page, and you got 100 donations. Your open rate is 2000/9000 or 22.2%. Your click-through rate is 500/2000 or 25%. And your completion rate is 100/500 or 20%.

Questions about how to measure using your email tool? Or, how to improve your results? Ask Me.

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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

An email I received not long ago asked: “What can a small non-profit, looking to raise about $5 million for a Capital Campaign, expect to pay for a consultant to conduct a study and then (guide) the Capital Campaign?”

The size of your non-profit relates to the question only in the context of whether you have the constituency that can support your campaign.

The actual cost of a Campaign Planning Study would be based on:
(1) The amount of time needed to conduct the preliminary discussions … the getting to know you meetings between the consultant and your Study Committee;
(2) The time needed to construct the questionnaire for the interviews;
(3) The number of interviews that would have to be done and the time required to generate the Study Reports; and,
(4) The expenses the consultant would incur (travel, lodging, etc.) during the process.

Pre-Campaign Planning Studies run anywhere from $12,000 to $20,000, depending on the combination of the above factors, the number of individuals conducting the interviews, and the extent to which a consulting firm feels its reputation entitles it to charge more.

You can get a good idea (not a firm figure) by calling and talking with a number of fundraising consultants. You can also get a good idea of whether the folks you talk to are the kind of people with whom you (and your constituents) would be comfortable working.

As to the cost of counsel to work with you through a campaign, since the Study will suggest how long it will take to conduct a campaign, that figure can only be determined after the Study is completed.

BTW, the preparation for a capital campaign can take a year or more. In essence, the Planning Study begins the preparation process. Then, if that preparation is done properly, the actual campaign should only take a few months.

And, you should not feel that you have to hire the same consultant/firm for the Study and for the campaign. If your planning process is adequate, you’ll need minimal help from counsel for the actual campaign.

Talk with a number of consultants, check their references, have them meet your leadership, select the one who is the most comfortable to work with.

Related Reading/Blog Postings:

• The Feasibility Study is Obsolete
• Another Reason I Object To Feasibility Studies – Part 1
• Another Reason I Object To Feasibility Studies – Part 2
• The Planning Study – Part 1
• The Planning Study – Part 2
• The Planning Study – Part 3
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Have a comment or a question about starting, evaluating or expanding your fundraising program? Email me at AskHank@Major-Capital-Giving.com. With over 30 years of counseling in major gifts, capital campaigns, bequest programs and the planning studies to precede these three, we’ll likely be able to answer your questions.

Recently, someone asked a question about Celebrity Auctions, and what immediately came to mind was how much money could I get for auctioning off a celebrity?

If it is the right celebrity, probably a lot !!

But seriously folks….

Celebrities are a great way to bring out the crowd. Having a celebrity at your event pumps up the audience and the bottom line.

Celebrities come with and from a variety of interests. Depending on your organization, a sports figure might be a better ask than a Hollywood movie star or a television actor. And don’t leave out the producers and the writers. They, too, are “celebrities” who can draw a crowd.

Your favorite politician, television news anchor and the CEO of a local or major corporation all go on the “celebrity” list. Each brings something special to the table.

Any of them might become your emcee or auctioneer for the evening. And being able to feature an item belonging to or brought by the celebrity to be auctioned is also a draw. Sometimes, celebrities can obtain (signed) items from their favorite artist or their favorite novelist. They could bring a favorite children’s book, and if they have a favorite designer, you might be able to land a one-of-a-kind garment.

Frequently you can auction lunch with the celebrity and/or a tour of his/her movie or television show and meet the rest of the cast. We have done this and the winner has ended up having lunch with the celebrity and the show’s cast and crew. Some celebrities have also provided signed scripts for auction.

Another area to look into is art, whether it is a signed limited edition poster or an original oil painting by a prominent artist in your community (or a famous person who is not known as an artist), art does well at auctions.

You might consider a book nook for autographed volumes; an art corner; a wine bar stocked from a local vineyard; a jewelry display, etc. You can go broad or narrow depending on how good your contacts are in the different areas of interest.

Think creatively. Hold nothing back and you may find the right combination of celebrity and event.

The bottom line, however, to ensuring a successful event, is to have an audience that will spend the money. And, if/when the price starts to zoom up for an item, you need an audience that, in the spirit of the evening, will keep the bidding going.

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Have a comment or a question about creating or expanding your special event? Email me at Info@NatalieShear.com. With over 30 years in conference and event planning, we can help you turn your vision into reality.
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Have you seen Natalie’s ebook on Special Events ??