Inaugural Do-Good Chat: Questions & Answers

Last night, I hosted my first “Do-Good Chat” and it was a great success! A discussion completely determined by participant questions, the Chat is a monthly live event where I answer participant’s questions and provide information related to starting, operating and sustaining a nonprofit organization.

I hope you will join me in the next session, Thursday, February 21^st at 7pm (EST). Register here for the free event,

Below are last night’s questions and my answers.

I am in the planning stages for my nonprofit and I’d like some tips on how to recruit board members.

Recruiting members of your “founding board” should be done with care. You want to choose people who understand and genuinely support your vision. Though it is important to have an eye for professional skills, you want to give equal attention to the personalities you recruit. Members of your first board must be willing roll up their sleeves and go to work -- giving their time, talent and treasure. They must also be able to understand and get along with each other.  I recommend you start with five members, but you can have as few as three. Ideally, you should have a lawyer and an accountant. It would be great if you also have a member of your target beneficiary community. For example, if you are starting a youth serving organization, have a young person serve on your board. Their input can be invaluable to your mission and vision development process as well as program and service design.  Though there is nothing wrong with having family members or friends serve on your founding board, make sure they understand what they are signing up for. Also, once you become a paid staff member, a conflict of interest issue could develop. Finally, I believe all boards should set term limits. For your founding board, I suggest you set a term of one to two years. As time goes on, you may change extend it to three years. Setting term limits will keep your board stocked with fresh energy, ideas and an ever expanding support network. Past board members may remain involved through other forms of volunteerism, such as serving on a committee.  

I have been doing lots of volunteer work at my son’s school and could use some fresh ideas on how to manage volunteers and events.

The key to successful volunteer management is communication. A volunteer should clearly understand his/her role and responsibilities. I recommend using position descriptions and reviewing them with the volunteer at the start of any assignment. When it comes to managing groups of volunteers doing similar work, you can review the role and responsibilities in a group setting – be ready for the questions! When you are clear about your expectations, volunteers are better positioned to meet them. If the volunteers are helping you to put on an event you are coordinating, you have to engage them early. For example, if they are going to serve as your planning committee, get them to the table early and allow them to actively participate in the planning. Outline your timeline (setting realistic goals) and assign duties and tasks that your volunteers are both willing and capable of performing. Give them well defined deadlines. Volunteers are people and as we know, some people procrastinate. It’s your job to check-in with your volunteers. This will help you to:

·         know if your volunteer is completing the task as assigned;

·         prevent your volunteer from going too far down the road in the wrong direction;

·         provide your volunteer with support and any needed further instruction;

·         make your volunteer feel valued and appreciated; and

·         have peace of mind (that’s always helps). 

Always acknowledge your volunteers, say thank you as many times as you can, and provide lots of opportunities for them to ask questions, give input and provide feedback.

I see so many boarded up buildings in my community, I want to get a grant to rehab them for people suffering from addiction.  Will the City give me a grant?

This is a great question to which I cannot give a “yes” or “no” answer. But it brings up an important issue to discuss. I am always excited to meet someone whose passion drives them to take on complex projects in order to deliver much needed programs and services. However, it is important to remember that passion can only take you so far when it comes to executing a complex project or developing a successful program. In this case, you want your City to give you a grant to do something that would benefit the City in several ways: (1) remove decaying buildings from what are likely under its ownership, (2) provide support and resources to a segment of its vulnerable citizenry, and (3) in-directly and quite possibly directly impact crime rates, death rates, and a host of health and human service programs. This is all great; but before you can achieve any of these lofty goals, there is much homework for you to do. This homework, an investment of your time and likely your personal resources, will help you to determine if you are actually ready, willing and capable (I have no doubt you are) to make your dream a reality. 

Here are my suggestions for first steps:

·         Identify the exact house(s) you want to rehab.

·         Draft an outline of what you want to achieve, broken down into phases (i.e., secure units, rehab units, develop programs, secure staffing, etc).

·         Establish what I call your “Vision Team”: Identify key individuals willing to volunteer their time and talent to help you assess the feasibility of project from a development perspective as well as a programmatic perspective. Your team might include a developer, city planner, accountant, and substance abuse treatment specialist.

·         After you have secured buy-in and the “green light” from your Vision Team, identify and meet with the appropriate City staff in housing, health, and, if possible the Mayor’s office. Getting their buy-in and the “green light” is critical to your success.

This will not be an overnight process. But if you are committed, I have no doubt you can achieve your goal – changing the lives of countless people affected by addiction.

I just started my nonprofit and we don’t have 501(c)(3) status yet, does that mean we cannot ask for grants and donations?

Before I delve into answering this question, let me clarify that having the 501(c)(3) status from the IRS is not what makes your organization a nonprofit. Nonprofit status is based on how your organization is formed at the state level. When you prepare your Articles of Incorporation, also called a Corporate Charter, you explain the purpose of your organization and file it with your state. Once approved, for all intents and purposes, your organization is a nonprofit. However, that does not necessarily mean you qualify for grants – in most cases you will not. That is because in order for donations to be tax deductible, they must have been made to an organization with a valid tax exemption status determination from the IRS. In most cases, grant makers require organization’s to have the IRS tax exemption status determination to qualify for their support.

The basic requirement for getting tax exempt status is for the organization to specifically limit its purposes to purposes that the IRS classifies as tax exempt. You acquire 501(c)(3) tax exemption by filing IRS Form 1023. The form must be accompanied by an $850 filing fee if the yearly gross receipts for the organization are expected to average $10,000 or more. If yearly gross receipts are expected to average less than $10,000, the filing fee is reduced to $400. I encourage anyone starting an organization in which they plan to secure grants and donations for the purposes of operating a staffed organization to file with the higher fee.*

The only thing precluding you from securing grants and donations prior to securing you 501(c)(3) status, is each grantmaker’s policy and each individual donor’s willingness to make a non-deductible donation.

*Consult your accountant and/or attorney to determine what is best for you.

Nonprofit Financial Management: Uncovering a $14K Check Payable to “CASH”

Following nonprofit news outlets is one way I stay informed about what’s going on in the industry. Lately, there have been a number of stories about poor financial management practices that resulted in terminations, convictions, loss of credibility, and even closures. In most cases, the activities had gone on for months or even years!

You might be wondering, “How is that possible?”

Well, I know from personal experience that it is indeed possible.

I was once hired by a nonprofit that at the time existed mostly on paper. Not much, including audits, had happened in the few years prior to bringing me on. And despite having a board comprised mostly of accountants, lawyers and business professionals, the financials were in disarray.

Over several months, I went meticulously through over three years of bank statements, invoices and canceled checks. There were countless boxes full of files and loose pieces of paper, including a canceled check written out to “CASH” – written for $14,000 with nothing on the memo line! 

I’ll never forget the moment I saw it or the thoughts that ran through my head:

          “What was this for?”
          “Payable to “cash”; how is this possible?”
          “Did the board approve this transaction?”
          “How will I ever figure out how this money was spent?”

Well it took lots of detective work and lots of time, but I did figure out how the funds were spent. (I cringe at the thought of what might have happened if I hadn't.) I also figured out that the check was  requested and signed by the same person who spent the funds! (Are you cringing?) So in addition to entering all of the financial history into the organization’s new financial management system (QuickBooks), I worked with the board to develop new financial management policies and procedures so that every transaction, no matter how big or how small, would be documented electronically along with the appropriate backup.

How well are you managing your organization’s financials? To ensure you are safeguarded from financial crisis, check out these resources:

NFP Partners’ Financial Management Best Practices for Nonprofits

National Council of Nonprofits’ Financial Management
Accountable Charity’s Tipsfor small to midsized nonprofits using QuickBooks

Also check out The Word Woman Facebook page for more nonprofit tips, webinars, workshops, grant opportunities, and more! 

Like the President, I’m preparing for an Inaugural! How Exciting!

The inaugural session of my Do-Good Chat is just a week away. I am so excited by the amount of interest and the questions! What is the “Chat”? It’s a monthly teleseminar for people who are currently taking action toward their vision of a better world through service in the nonprofit sector or who are just getting started. I address your pressing questions and provide information related to starting, operating and sustaining a nonprofit organization. The content of each discussion will be completely determined by participant questions!

The idea to do the “Chat” simply popped in my head one day when I was answering one of the many “quick” questions I receive by email and social networking site. I have found that many people have the same questions. So instead of answering each person individually, the Chat will allow people to hear answers to their questions and those of others.

Each call will begin with answers to questions submitted in advance, followed by (as time permits) additional questions and comments from participants. Here are a few examples of the questions I’ve received thus far:

·         I am in the planning stages for my nonprofit and I’d like some tips on how to recruit board members.

·         I have been doing lots of volunteer work at my son’s school and could use some fresh ideas on how to manage volunteers and events.

·         I just started my nonprofit and we don’t have 501(c)3 status yet, does that mean we cannot ask for grants and donations?

 Have you registered for the FREE Inaugural Do-Good Chat? Space is limited, so don’t delay!

Click here to register.

Funder Site Visit: 8 Tips for a Successful Introduction

 

I recently arranged for a nonprofit to have an introductory site visit from a prospective funder. When the staff first heard the news, they cheered with excitement. But quickly the big grins on their faces were replaced with looks of sheer panic. They had never had a site visit from a prospective funder.  I was soon bombarded with:

 

 

“How do we prepare?”

“What are we supposed to do?”

“What will they want to hear?”

“Who’s going to ask them for the money?”

 

They were all great questions. But before I answered any of them, I reminded the staff of a very important fact: They were going to be visited by people.

Yes, funders are people, too. They just happen to be people who have money to support organizations engaged in work that aligns with their priorities. And since they are already supporting other organizations whose work align well with their priorities, you had better make the best of any introductory site visit.

Here are 8 tips for a successful introductory site visit:

1. Clean your home. Have you ever been invited to someone’s home and arrived to find it a mess? How did you feel? Well, that’s it exactly how a funder will feel if they arrive to your office and it’s not clean, organized and inviting.

2. Everyone in the organization should be aware of the visit. Though there may be only one program or service that aligns well with the funder’s priorities, this is an introduction to the organization. Every member of your “family” should be informed well in advance about the visit and prepared to answer any questions they may be asked about themselves, their work and your organization’s beneficiaries.

3. Greet your visitors at the door. Ideally the Executive Director and/or Development Director will greet your guests promptly when they arrive. This would be a great time for them to tour your offices.

4. Be hospitable. Serve refreshments. If it’s winter, you might offer coffee, tea and pastries. If its summer, you might offer iced tea and fresh fruit. Your visitors don’t expect a spread, so don’t go overboard. You want them to be impressed by your work, not your local bakery.

5. Have a written agenda. There should be a formal agenda outlining the flow of the discussion. Though you may be tempted to jump right into talking about your organization and the work you do, remember this visit is as much an opportunity to learn about the funder as it is for the funder to learn about you. Give your guests an opportunity to introduce the Foundation, its mission and priorities. You will likely learn information not available on their website.

6. Don’t overload your guests with materials. Provide each representative with a packet of materials related to your history, mission, programs, etc. Less is more. It is better to package the materials together and give them out all at once than to distribute them individually during the meeting.

7. Keep it concise, relaxed and relevant. Develop key talking points but don't be scripted. The discussion should flow as a friendly conversation. Avoid giving speeches. Think about the funder’s interests as you consider what to share (i.e., success stories, recent accomplishments, what you hope to accomplish).

As you prepare your talking points, keep these guidelines in mind:

· The funder doesn’t know your organization. They will likely have questions that start with who, what, when, why and how.

· Succinctly emphasize successes and challenges. Try not to speak for more than 3 minutes at a time without a break.

· If at all possible, avoid acronyms. If you must use them, be sure to define them first. Using acronyms unknown to your guests will leave them and the point you are trying to make lost in alphabet soup.

· Don’t lecture (no PowerPoint presentations). You want to have a conversation so your guests can get to know you. Allow your guests to ask questions.
 

DO NOT ASK FOR ANY MONEY! This is an introduction. Unless your guests bring it up, there should be no discussion of money during the site visit.

Keep in mind, no two funders are alike and no two site visits will be alike. Be sure you structure each site visit to the prospective funder.

 

Are you preparing for a site visit from a prospect funder? I’d love to hear about it!

P.S. - The nonprofit had a great site visit. In fact, they were invited to submit a formal request for support!

 

 

 

Measurable Impact: A Sustainability Requirement for Nonprofits

Without a doubt, nonprofits are run by passionate people committed to their cause. But many of these passionate people believe something that isn't true. They believe the impact of their work is obvious to themselves, their donors and the broader community. They mistake activity for impact. In fact, for many years major donors would accept activity as a demonstration of impact.

For example, a human service nonprofit would report a 20% increase in clients served. Both they and their donors would accept the increase in clients served as greater impact. But the activity (serving clients) is an output and not an outcome.

Outputs include things like number of workshops held, number of volunteers trained, field work completed, houses built, etc. While outcomes demonstrate the impact of the nonprofit’s work in terms of measurable and lasting effect. In other words, outputs are how you get to outcomes (impact).

 

Output-focused funding is generally a thing of the past. Today's donors are outcome-focused.

Nonprofits that follow an outcome-focused approach will:

• have greater impact,
• demonstrate their impact quantitatively,
• secure more support, and
• experience sustainability and growth. 

The outcome-focused organizations determine anticipated outcomes for each program and service and develop methodologies for tracking activates and gathering data that measures impact toward the anticipated outcomes.

Steve Mariotti, founder of Network for Teaching Entrepreneurship, offers great tips for measuring impact in his two-part article: Is Your Nonprofit Making an Impact? Prove It!

Check out The Word Woman Facebook page for more nonprofit tips, webinars, workshops, grant opportunities, and more!