Fundraising Strategies for a Growing 501c3

  

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In these stringent economic times local nonprofit organizations need to learn to change their fundraising strategies as they face a lack of donors with deep pockets and an uncertain economy in which thousands are jobless. Charity giving has remained a relatively fixed percentage dependent on GDP, estimated to be around two percent of average household disposable (after tax) income (Giving USA Foundation 2011). In this report Growing Philanthropy in the United States by Adrian Sarageant and Jen Shang, important and valuable information is offered to guide your nonprofit organization in the fight to promote and develop philanthropy.

In the report they touch on four major themes containing various steps:

• Theme 1: Enhancing the Quality of Donor Relationships- This is done by redefining relationships from donor relationships to individual relationships. Re-orienting toward longer term measures of fundraising performance. Enhancing focus on retention and building supporter loyalty. Develop a more integrated approach to fundraising. Break down organizational silos and encourage greater collaboration between teams. Give supporters greater control over the relationship. Promote the development of shared back office facilities. Tackle high turnover rates in the fundraising profession. Educate all stakeholders about the necessity of a longer term and integrated approach. 

• Theme 2: Developing Public Trust and Confidence in the Sector- Achieve by empowering the regulators to enforce 100 percent filing of Forms 990 and increase their utility. Blow the whistle on organizations claiming to have zero costs of fundraising.Fund the development of a website in the United States to educate the public, boards, and other stakeholders. Encourage nonprofits to develop complaints schemes.Fund the development of a "Philanthropedia" to facilitate peer-to-peer evaluations of nonprofits. Develop new and more appropriate measures of performance. Develop the self-regulation of fundraising.

• Theme 3: Identifying audiences, channels, and forms of giving, with a strong potential for growth- Encourage the adoption of monthly giving. Improve the sector’s engagement with young people. Encourage and promote best practices in social media. Encourage asset-based giving. Develop expertise in broadening participation in giving. Improve the quality of bequest fundraising practice. Challenge the wealthy to plan their own philanthropy. Create a nonprofit mutual fund. Leveraging companies to promote philanthropy.

• Theme 4: Enhancing the quality of fundraising training and development- Invest in the development of fundraising research. Create a fundraising research institute. Redesign the system of professional development and certification for fundraisers. Encourage the development of academic qualifications in fundraising. Appoint a “sales force” for the fundraising body of knowledge. Call out institutions offering certificates purporting to be qualifications. Educate board members about the intricacies of fundraising.

Key themes for growing philanthropy from blackbaud.com complements of a study form Blackbaud, The Center on Philanthropy at Indiana University, and Hartsook Companies, Inc.

5 Tips on Financing a New NonProfit

  

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Starting a nonprofit organization from new is neither for the faint hearted nor weak spirited. Whether you are starting a nonprofit organization or joining one that is already in operation, you'll need to find creative ways to fund it to accomplish the work that supports its mission. How one goes about getting those funds will usually look into getting either a grant or a loan. Grants and loans generally come from foundations, the government, and corporations. As a new nonprofit it will have little to no financial history so large grants and loans will be very hard if not impossible to attain.

Here are the 5 bullet points Nonprofits Assistance Fund, they directly addresses new nonprofits and provide insight on how to begin bringing in money and other resources for your organization.

• Start with a budget.  Your budget communicates your plans and tells prospective donors and funders how realistic you are in your work.  A start-up budget is likely to be very modest with minimal staff and facilities. This checklist can help you begin, but keep in mind your first year expenses may need to be very limited to show you understand how to start from the beginning and not take short-cuts. If you have a reasonable plan, supporters are more likely to bring dollars to the table than if you only have good intentions without a roadmap. 

• Your founding donors probably know you.  Covering the first few expenses (even filing the IRS form costs money) has to come from somewhere. People who already know and trust you will be your strongest supporters. Have a party to explain your mission to friends and family, and ask them to help cover the initial costs. Nonprofit founders often stand alone for too long, and paying all the expenses out-of- pocket can cause a lot of stress early on. 

• Think small. Many nonprofits want to request a large grant right away. The big request is much more likely to be successful if you can show a track record at little achievements. There are many local businesses, houses of worship, and community groups which could afford $100-$500 donations if they see a budget and some initial investment from a start-up organization (see 1 and 2 above).

• Be wary of debt. A loan or a credit card advance can seem like a good way to get the ball rolling, but often this start-up debt can hobble an organization for years to come. The money you get in earnings and donations in years 2 and 3 are going to be needed respectively. Spending income to pay off debt from the first year can significantly impact an organization’s financial situation down the road.

• Plan long-term. That big foundation request mentioned in number 3? Don’t forget about it completely. Be ready to show how it becomes viable in year 2 or 3 for your new organization. Start looking at funding cycles, time-lines, and begin meeting with philanthropic staff. This, along with proven results, will help you get that first application in on time and ready for approval.

 Click screenshot to read whole article from Nonprofits Assistance Fund

5 Critical Changes for Nonprofits in Dealing with Foundations

  

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I had the pleasure of moderating a panel discussion for the Association of Development Officers Annual Conference in Tarrytown, NY. The theme of the conference was “Differentiation in the New Philanthropy World” It was a great day of idea sharing and included a wide range of breakouts regarding this topic. More than 200 people from the non profit community in our area attended and walked away with the latest ways to respond to the ever-changing landscape in philanthropy and differentiate their organization when interacting with donors, foundations, supporters and the public. We were pleased to be a sponsor to support such a worthy organization.

My panel included Naomi Adler, Esq. CEO, United Way of Westchester and Putnam, Melinda Burge, Executive Director of The Community Fund of Bronxville, Eastchester and Tuckahoe and Adam Kintish, retail market manager and VP, TD Bank (Adam represented their foundation). Their grant funding budgets range from $200,000 to $5,000,000, giving us wide range of capacity.

Even with these differences, they all agreed on some common changes that are taking place within their organizations and also the way in which they work with grantees.

Non Profits find themselves in a perfect storm:

• Less funding from all sources
• Tough economic times which are creating more demand for your services
• Stricter guidelines and accountability from funding sources
• Increased transparency and reporting requirements
• Changes in technology – email, social media have created a new level of speed and access to information
• Increased competition for dollars from many non profits

Here is what I heard from the foundations regarding their challenges:

• They are under extreme pressure from their own funders and their need for accountability has increased.
• Due to less available funding they have had to cut back in many areas, including infrastructure and allocation amounts.
• Because of decreased capacity and resources that their funded non profits face, they find themselves having to offer more services to them, adding more strain to their foundation.

So what has this done to the way in which they allocate funds and work with grantees?

1. It is critical that they receive very clear, concise submissions that include everything they asked for. Sounds basic, but it must be easy to find the information and no grammatical errors. Less is more. But clear!
2. You must include the critical numbers and they must show that you are making a difference in your area.
3. Communication is critical. Keep the foundation up to date proactively on how you are doing. Give them the information they want before they ask for it.
4. Know when the foundation board meets. Just prior to that meeting is a good time to send an update
5. Bring a mix of people to the table when meeting with a grantor to provide a deeper bench and broader personalities to help deliver the message. CEO and board members are sometimes a great addition to the Development Officer.

I hope that these 5 principles help you when working with foundations with grant requests. This panel was put together with the guidance of Sharon Guss Pollack and Joanne Essig Stewart, Partners with Goodworks Advisory group, LLC. Please feel free to reach out to Sharon, Joanne or myself for more information.

Sharon Guss Pollack
Email: spollack@goodworksadvisorygroup.com

How to Increase Nonprofit Funding - 5 Best Practice Traits for a Board

  

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At a recent luncheon for the Association of Development Officers, collegues and I listened to a very informative presentation from Don Crocker, CEO of the Support Center for Non Profit Management. Don has been able to crystallize what I believe most non profit organizations strive to attain. Don touched on three important aspects essential to all non profit boards. Aspects including a board that is functioning well, one that brings needed value to the organization, as well as a board that supports the leadership team in all ways.

Right now more than ever due to dramatic economic downturn (severity and length still a question), increased regulation (Auditing, IRS 990, other), late and slow payments, credit markets tight, an environment full of fear and cynicism, and increased public scrutiny, boards now more than ever need to reorganize and rally for the common good of the organization.

As Don said during his presentation, status quo is no longer enough nor is it acceptable. Building this new board can take several years. A long sometimes frightening task, but one that can be best tackled piece by piece.  He referenced a few members from organizations that have done this very well, one being Geoffrey Canada.

Geoffrey Canada is the president and CEO of the Harlem Children's Zone in Harlem, New York. He has done a terrific job turning the organization and its board around. It was only 4 short years ago that he realized that 95% of his organizations revenue was funded by government sources. Looking at a downward spiral, Geoffrey took it upon himself to make a change. He began rebuilding his board, bringing in many new members that have now instilled a new found sense of value and support to his organization. The Harlem Children’s Zone now receives most of their funding from various foundations, corporations, individuals, and other sources causing the government funding to be only 28% of their operating revenue.  

Listed below are Don’s lists of the traits for the board of the future:

• Increased Board engagement is NOT optional!  Board must step up and govern and they must be “in-charge” of hiring and firing competent management.
• The Board as a body and as individuals must sharpen their understanding and ownership of finances.
• Board members must up their activity in engaging new supporters &   stewarding long-term supporters.
• The Board leaders and CEO must communicate openly and often.
• The Board must organize itself and its individual members to be effective and efficient, set clear goals for itself, and regularly measure its progress toward results.

Since having heard Don speak I have talked to many clients about this topic. There are mixed reactions to this. One of the big stumbling blocks is that many non profit boards still have not enacted term limits or don’t enforce them. It is hard to bring in new board members if there is not a spot to put them.

I would love any feedback on these topics, please feel free to leave a comment.

Photo By Okeefew from flicker.com
Don Crocker can be reached at:
Phone: 212-924-6744 ext. 306
Email: dcrocker@supportcenteronline.org

5 Social Media Benefits for Nonprofits

  

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Usually I focus on ways to reduce risk or transfer risk to help protect your organization. But there are also opportunities that come when you take risks. I believe that getting into social media has some risks, but I also think there are clear benefits.

In the past week I have met with 6 non profits organizations. All of them are familiar with social media: Blogging, Linked In, Twitter, etc. Some of them are doing it to some extent, but all of them want to do it more. Our firm just started Blogging and using Social Media 4 months ago and the results have been great.

It takes discipline, hard work and an open mind. It also takes persistence and the ability to change quickly and adapt to new ideas.

As a stakeholder in several non profit organizations I would love to see more outbound pictures, videos and short communications to help keep me engaged. There are so many great organizations with great causes and missions they they can get lost. So if you have a current base of stakeholders I believe you need to keep them engaged.

So here are what I believe are 5 benefits to using social media to promote your organization.

1. You will let all your stakeholders know on a regular basis what you are doing.
2. You will keep them engaged.
3. You will spread the word to potentially thousands of new stakeholders through the viral spread in the social media platform.
4. You will potentially raise more money.
5. People internally and externally will feel good about what you are doing and spread the word.

Listed below are two of my favorite blogs that I follow to keep me inspired and up to date in this whole area.

Nonprofit Tech 2.0: A Social Media Guide for Nonprofits
www.nonprofitorgs.wordpress.com
Created by Heather Mansfield of DIOSA Communications. This is a great blog. Very informative and great content. She also runs a group on Linked In. Web 2.0 for Nonprofit Organizations. Sign up for that as well.

Beth’s Blog: How Nonprofit Organizations Can Use Social Media to Power Social Networks for Change.
www.beth.typepad.com
Created by Beth Kanter who I believe is up in Boston. Awesome content that keeps on coming. She is a real player in this area.

Cause Marketing

  

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I am working on developing a panel for a local business organization www.westchester.org. The goal will be to bring together the business community and Not For Profit community to learn ways to help both. The business community can finds ways to partner with a non profit that are passionate about and grow their business with branding. Of course the non profit will also have more exposure and more resources to support their mission.

I am looking for any good feedback on social marketing and names of potential speakers. And also some panelists that have had success in this area. Both from the business community and non profit community.

Here is a link to an NY Times article and also a link to a blog that provides great information.

NY Times http://www.nytimes.com/2009/11/12/giving/12BUY.html
Cause marketing Blog http://causerelatedmarketing.blogspot.com/

NY Budget Delay Hurts Local Nonprofits

  

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Due to the delay in finalizing the NY State budget, 76 Million in aid to Human Services will be held up until next year, maybe longer?  State officials said Westchester alone would have nearly $4.7 million withheld. That money, county officials said, largely funds child welfare services. Many local nonprofits that provide these services will have to do without. As private donations continue to dry up this is yet another blow to a fragile support system that is important to our everyday life.