Setting your fundraising goal

The need for financial support to do charitable work goes without saying. However, before you embark on any fundraising activities you must know why you are raising funds, how much money you need to raise, and for what the funds will be used. This is particularly important when raising funds through grant sources.

Whether you are fundraising to start a new program, to expand an existing program or to purchase new equipment, your fundraising should be guided by a fundraising goal that is based on what you actually need.

Consider these questions when developing your fundraising goal:

What do you need? Prepare an itemized list of the specific human and/or non-human resources you anticipate will be needed for success. For example, if you are starting a new program, you might need paid staff, office supplies, computer equipment and office furniture.

How much will each needed item cost? After you have prepared your list, you need to estimate how much each item will cost. For staffing, develop a job description for each role then use online resources like PayScale to find out what competitors or similar-size organizations are paying for similar positions and responsibilities. For other items, compare retailers to find out who offers the best price.

 

How much funding will you need in total? Total the estimated costs of each item on your list and add a buffer (about 10% of the total). The total estimated cost, plus the buffer, is your fundraising goal. Keep in mind, some funders may not allow the buffer.

 

With a fundraising goal based on a detailed budget, you are ready to identify prospective funders and to outline your strategy to get to your goal.

Recruiting "movers and shakers" to your nonprofit's board

I am regularly asked about how to recruit board members. I hear things like, "I don't know any good candidates" and "I can't make connections with the 'movers and shakers'". In growing your board, you may be having similar thoughts. If so, I have to ask:

• Who are these 'movers and shakers' and why do you think you need them?
• Are they the people who's pictures you see in the newspaper?
• Are they people who already sit on the boards of  "prestigious organizations" ?
• Are they the people you think have lots of money to support your organization and lots of friends with money, too?

The reality is those so-called movers and shakers may never be interested in serving on your board. And if by chance they did agree to it, would they be the active, engaged and passionate people you need?

Don't underestimate the value of the people around you. Judging a book by its cover can be costly -- any way you look at it.

When building your board, think about what you really need and not what you think you should have. That "nobody" you overlook today could become a "mover and shaker" tomorrow. Wouldn't it be better to already have him/her committed to your organization?

Recruiting board members is challenging for most nonprofits. Finding people with a passion for your cause; the skills your organization needs; a willingness to commit their time, talent and treasure (money); and an existing understanding of how to serve on a nonprofit board is literally like finding a needle in a haystack!

Just like in recruiting for any other position, identifying and vetting good candidates takes time. Additionally, even if someone looks good on paper, they may not be a good fit.

 

Building the board of your dreams requires a strategic approach that shouldn't be rushed. Most importantly, you should know what you need and write it down before you begin recruiting. There are two key questions to which you should have written answers:

1. What skills should exist on the board? The top two are legal and financial. Having board members with these skills will result in cost savings for your organization. But you might also want someone with skills in marketing, business management, human resource management and fundraising. You should also have someone who represents your targeted beneficiary population. And, diversity is a must!
2. What will board members be expected to give? This question relates to their time, talent and treasure. You should have a detailed description of board member duties and responsibilities. Successful board recruitment requires a clear understanding and agreement of expectations from you and each prospective board member.

There’s a grant for that!

I am approached regularly by people who ask, “Can you write me a grant?” Some are current nonprofit leaders, some are aspiring nonprofit founders and others are current or aspiring entrepreneurs. They all have an idea and an expectation – someone, somewhere will give them money for their idea.  It’s almost like Apple’s 2008 slogan "There's an app for that” or bet yet, their 2010 slogan "There's an app for everything".

People come to me thinking not only “there’s a grant for everything” but getting a grant for anything is as easy as going to the App Store℠ and hitting download. If only!

There is a process for securing a grant and it starts with something that unfortunately too many prospective grantees are not -- grant ready.

Here are some questions to help you to determine if your organization is grant ready:

·     Has your organization secured the 501(c)(3) tax exempt status from the IRS? Though this is not a requirement for all grantmakers, most grantmakers will not provide funding to a nonprofit without a valid 501(c)(3) status determination letter from the IRS.

·     Have we determined specifically why we are seeking a grant?  Most grantmakers giving is guided by specific priorities and areas of interest. Additionally, many limit how their support can be used. Grantmakers may have limits such as populations served, geographic boundaries, and types of expenditures. 

Here are examples of key questions to which you should have answers before pursuing a grant:

Who will we serve? What is the demographic profile(s) of your target population?

Where will we serve? Community? City?  State?

How will we serve? What will be your program delivery model?

Why are we offering the program?  What evidence do you have that your proposed program is needed/wanted? What outcomes or impact do you expect to achieve?

What is our budget? Answering the previous questions will assist you in developing your budget.

Whether you plan to engage a professional grant writer or to prepare grant proposals internally, you should know and understand the grantwriting process. That’s why I am offering a Grantwriting 101 webinar on Saturday, February 23 at 1:00 pm (EST) and Wednesday, February 27, at 3:00 pm (EST). I’ll provide a step-by-step review of the standard sections of the grant proposal; do's and don'ts; and tips on how and when to communicate with grant makers.You can still register here.  Register today!

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!