Should the media have a role in rating charities?

No one wants to be ripped off in the name of charity.

Everyone has heard of charities whose practices may be or are questionable. When the situation is serious enough it makes the news.

In response to public concerns several institutions exist that "rate" charities. The information published by these organizations is accessed by individual donors, foundations, employees, volunteers, independent contractors, and even private and government watchdog groups.

As a freelance grant writer and consultant, I can attest that if you aren't rated by one of these organizations, or you have received a poor rating or some sort of alert it will impact your fundraising capabilities.

How they work.

The information available to the public on rating sites can range from simple proof of nonprofit status to an actual assessment of the legitimacy of the organization and its practices.

Spoiler Alert!  Almost without fail, these private, usually nonprofit organizations have a minimum revenue qualifier that determines which charities they will rate.  For most it is in the one million dollars and up range, but at the very least it requires the filing of a 990, not just the postcard.

For that reason, you are not likely to find your local food pantry or animal rescue on some of these websites.  Some, like GuideStar, will list the basics even for smaller charities, which at least allows you to be sure they are registered.

You can also search the IRS website for verification of approved status, the general web for anecdotal reviews or consult your local Better Business Bureau.

I don't recommend social media sites like Facebook as a single source for rating a charity, but they may flesh out the dry facts available elsewhere.

   

But who rates the raters? Are these just online collectors of  raves and rants by fake reviewers, disgruntled employees, clients or donors?

For the answer to that you have to ask yourself a few questions. Questions such as: how did they come to be in existence, how reliable is their information, and what criteria do they use to assign ratings?

One well known organization is Charity Navigator or CN so let's see what they have to say about their process.

Charity Navigator has been in business as a nonprofit since 2001 according to their website, arising out of a perceived need to shed light on the inner workings of charities.

Originally conceived by Pat and Marion Dugan, whose story is available on the website, CN is a bellwether rating organization.

It is definitely one of the top three starting points on my list of charity verification sources.

On September 1, Charity Navigator instituted a new rating scale.

The website goes into great detail about their methodology. You can view it here.

I mentioned that CN is one of several sources I use before deciding whether to agree to offer my services, as well as my own donations to a nonprofit.

One thing has always caused me to view some of the information  available throughout the industry with a squinty eye, and the CN website details it perfectly.

That is the way media reporting is included in a list of rating criteria alongside nonprofit experts, seemingly assigning those reports the same level of credibility as those done by experts.

For instance, one of the ways to get a poor rating is to have an employee or official who  embezzles from your charity, a story often first reported by a news agency.

While some might see that as blaming the victim, there is sound reasoning behind it.

It goes to the ability of the charity to monitor its use of funds by having adequate financial security safeguards in place and actually using those safeguards to prevent theft.  It addresses the character of the organization itself.

But it also goes to the accuracy of the information.

CN freely admits that it does not, and indeed has no ability to, assess the accuracy of the media information it uses.

For me that's a cautionary flag.

Yes, where there is smoke there is usually fire, and news reports are definitely a smoke signal.

Conversely, one has only to look at the media's conduct during this election season to have serious concerns about the ethics, veracity and credibility of the media.

For that reason, if the allegation of financial mismanagement or criminal activity is one of the major knocks against the organization being rated, I tend to hold my opinion in abeyance until I can ascertain if it was an isolated incident in an otherwise sterling record.

I would also want to know whether anyone followed up with actual arrests and/or prosecution of the persons involved and whether there is any past history or indication of financial malfeasance or incompetence.

Charities, even more than Caesars wife, have to be above reproach and the larger and more visible they are the less leeway they have.

Still, accusations usually make the front page, while any retractions or exonerations are usually  buried on page 52 under last week's stock market report.

I am not saying that you or CN should disregard this type of information. I don't, and neither should you.

I am saying that media reports should be vetted as thoroughly as the charity before it they are used as a criteria for either approval or condemnation.

Should you have a blog?

Blogs are very popular with both nonprofits and businesses. In fact, they are often hyped as the quintessential engagement strategy.

Far be it from me to debunk that.

What the heck, this is a blog. If I didn't believe that it had value, why would I do it?

Aside from that, I have many clients whom I assist with their blogs.

So why blog?  There are a number of reasons:

• ·         To keep current customers or partners engaged with your brand.
• ·         To impart knowledge
• ·         To increase or maintain sales or donations.
• ·         To receive feedback
• ·         To introduce your business or charity to new markets or donors
• ·         To increase search engine rankings
• ·         To research market trends

Blogs should have a clear focus and provide your target audience with some value for the time they invest in reading and following you.

Sometimes it is just engagement. That's a really good goal if you are in the business of creating social change or affecting public opinion. It gives like-minded people a place to belong, and the benefit of numbers.

Most of the time, it will be to enhance your business, either in terms of direct sales of a product or service, or in terms of attracting new clients and maintaining relationships with existing and former ones.

Blogs have the potential to be far more engaging that a short tweet, or a few words on Facebook.

Ideally they should foster a two-way communication, either one-on-one or even by just acquiring followers.

The reader who passes your blog along to a friend or another social media channel is doing some of your outreach for you.

A lot of people start blogs, but can't or don't maintain them.

Sometimes it’s a time crunch. Sometimes the blog doesn't seem to engage readers. Other times the cost in either time or actual cash seems unnecessary.

Believe me, I understand. In addition to this blog and another one of my own, this is part of what I do for a living.

Good posts take time. Just curating  (NOT plagiarizing!) other content and repurposing it for your own use is time-consuming, and good original writing is even more time-consuming.

If your blog doesn't seem to be producing the results you expected, there's usually a reason.

In my own experience working for clients with widely differing business profiles, the most common problem is failure to properly identify either the target audience or the blog's goal or both.

The blog needs to bring you or your client the sales or donations or volunteers or whatever  is needed.

For instance let's just say that I have a client who is a home remodeler.

That client does not want to teach prospective customers how to do the work. Yet I see many remodeler blogs that go into great detail about how to properly prepare a surface for paint.

Unless you are selling paint, that's the wrong emphasis.

Sure, some readers will say "Wow that's too much work. Maybe I'll call this business and hire them."

Most are going to say "Great. Now I can tell Cousin Charlie exactly what to do when he comes over to help me."

The focus should be on why the remodeler can provide a better outcome than Cousin Charlie.

One question I always ask my clients is "Who and what  is the focus of this blog? What do you want it to accomplish?"

You'd be amazed at how few people can actually provide an answer that benefits them.

Some have even said that they don't know, they just want to have a blog.

I guess I could say "Great. All the money spends the same. What do I care if the blog does you any good?"

I could, but I won't. I still have to look at me in the mirror every morning.

The truth is, there are times when you shouldn't have a blog.

If you don't have the time and/or the temperament to devote yourself to the blog, or to interact with me so I can produce quality posts for you, then a blog may not be for you.

There is a lot more to using a blog effectively than just the copy. Things like interacting with commenters respectfully, or converting readers to buyers are terribly important, but it can all start with the blog.

The blog is the gateway.  Don't put up a big "Private Property"  sign on your gate.

If you aren't sure whether blogging is for you, or you have a blog you'd like to have reviewed, drop me a line at rightwords@ida.net. I'd love to help. 

Filed your IRS Form 8976 Yet?

If you are or intend to be a 501(c)(4) organization, have not previously sought or gotten an IRS Letter of Determination, and have never filed an information return in the 990 series, this form is a new requirement for you and for what the IRS calls local associations of employees.

       

No other 501 C-section entity needs to be concerned with this new filing requirement.

 

However, failure to comply now can cost a qualifying organization and its key officers penalties totaling $5,000, assessed at $20 per day.

   

More information can be obtained at IRS.gov, at this link.

What is a 501(c)(4)?

The IRS broadly defines C4's as social welfare organizations or associations operating in the interests of the common public good, without intending to or accruing profit to the members, as stated here:

Reg. 1. 501(c)(4)-1(a)(2)(i) provides that:

[A]n organization is operated exclusively for the promotion of social welfare if it is primarily engaged in promoting in some way the common good and general welfare of the community.

The IRS offers further examples here, but note the use of the word "community." This differs from a C3 entity in that it does not support one identifiable group, i.e. low-income children or unwed mothers, while excluding others.

However, "community" does not have to mean a whole city or town. For instance a local homeowners association's "community" might be just the entire group of homeowners it represents.

Thus, a local improvement district might be a 501(c)(4) if it seeks to improve city parks or establish a lending library. A rural  homeowners association that seeks to buy snow removal equipment to be made available to the entire neighborhood could also qualify.

The main attraction for people seeking to form a C4 is that these organizations may engage in some forms of general lobbying or political discourse, where a 501(c)(3) cannot.

Note that the new Form 8976 is NOT equivalent to a Letter of Determination. It is, as it states, simply a notice of intent.  There is a $50 filing fee attached to it.

The IRS apparently believes that there are a lot of organizations operating as C4 entities that have never registered as such but are still engaging in prohibited political activities.

The problem with that is all of the money donated to or collected by unregistered or disqualified entities is taxable as ordinary business income.  There may also be criminal penalties if the money was collected and/or spent under false pretenses.

If you have any other questions or are trying to determine what type of charitable identity your new organization should apply for, contact me and we can discuss it.

How much overhead is NOT enough?

The matter of overhead, i.e. administrative costs,  is still and will probably always be a big deal for nonprofits.

   

The idea of keeping overhead really low is baked into the psyche of nonprofit organizations, the public and donors alike.

Still, it does cost money to be in business.

Thankfully, more donors are beginning to recognize that for a charity to serve the community, it has to stay in existence.

The standard for overhead spending right now seems to be in the 20% to 25% range, certainly no more than 35%.

Truthfully, there is no single "right" ratio.

Some charities have substantial indirect costs. Others can and do survive nicely on 15% or less.

The right amount is the no-frills amount that you need to keep your doors open.

For instance, food-based charities may spend quite bit on utilities, storage space, racking and material handling equipment.

Another that is based on volunteer staffed community outreach regarding education might need no more than a phone and a website.

Recently I had a nonprofit that wanted a press release written to tell the community that they were shutting down. Their main source of income was fees for services, but they simply didn't have enough clients to cover their operating costs.

One fact  I learned was that they had kept overhead to 7.5% of donations. There was no set budget for non-program costs.

One of the casualties of that approach was that they did not advertise beyond having a  website.

I did the press release and two weeks later, I got another call.  Could I do a press release retracting the closing?

When the first press release ran, they got over 70 calls wanting their services.

Up to that point, it seems hardly anyone knew they existed.

I'm happy to report that they remained in business, and have since created a budget for marketing.

Don't get hung up on meeting some artificial figure that doesn't work for your business or charity.

Sit down, develop a realistic organizational budget and stick to it.

To serve others, you first have to survive.

Does your small nonprofit need more cash?

The number one complaint Cloudlancer Writing Services receives from new and smaller nonprofits is that they are largely left out of the grant funding loop.

Either the grantmakers want several years in business, a revenue average of from $100K to $1 million, they aren't taking applications, or all of the above.

News flash…you don't need their grants to stay afloat and even grow.

The second largest source of funding for all nonprofits (after fees paid for services) is funding by individuals.

You say you have a donation button but no one clicks on it?

    

To increase donations you need to think like a marketer.

Good marketing doesn't initially focus on the product. It focuses on the needs of the audience for the product or service, and maintains a consistent message across all platforms.

In the case of nonprofits, when you need donations, ask yourself what your typical donor wants to see or hear.

To understand that connection, think about the sudden uptick in ads for those copper/ceramic coated cooking pans.

The infomercials don't start out telling you why their skillet or pan is the greatest.

Instead the ad spends well over half the time reminding you why you hate your Teflon™ coated cooking utensils.

The ad overtly capitalizes on your desire for a better cooking experience, while covertly appealing to your interest in new and healthier eating trends.

Learn the difference between grant proposals and donor marketing

Unlike grant applications, which tend to be program-specific, your core mission can work as your product when marketing to individual donors.

   

Individual donors are far easier to sway to your cause than the grant making institutions, there are a lot more of them and they are a lot easier to reach.

To market to them, think about why they donate. (Hint:  It's not because your organization can't pay the utilities this month.)

What do they get out of donating?

For some it might be personal because they are, or know someone who is, affected by the problem your programs seek to solve.

For others it might be a general sense of responsibility to society or perhaps it just makes them feel good to help.

This can  take a little detective work.  In the business world, it's called market research, in the nonprofit world it's donor outreach research.

Because everyone's circumstances change,  it's something you have to stay on top of to be successful over the long haul.

It's a bit more complicated than having me or anyone else write a boilerplate program narrative, but customization and attention to detail will pay off.

There are a number of approaches that will work under different circumstances. It can be a blog, Facebook, Twitter, YouTube, snail mail, a really well-designed website, or a combination of all of those.

Whatever you use, be sure that your message, your brand if you will, is consistent. That might be a common tagline, the name of your organization, or a visual, but it needs to become something uniquely identified with you.

Speaking of your audience, it pays to know who they are demographically. That allows you to tailor your appeals to their income comfort level.

Conventional wisdom says you should keep your smallest donation request above $25 or even $35 dollars.

I don't agree. One urban agriculture-centered nonprofit found that by starting with a very low minimum donation of five dollars, they were able to grow their donor base and increase their online donation traffic  by 350% the first year. The next year they dropped the $5 category, and 89% of their donors just switched to $10 without a second thought. Another seven percent actually moved up to the $15 level.

The secret for that campaign was the money was tied to what it would buy; seed packets, a hand trowel, a bag of fertilizer and so on. This image-heavy strategy didn't need 1000 words to explain where the money would go…just a picture and maybe five or ten words.

The idea there is that you want to build up a habit of supporting your nonprofit first and work to increase the average donation amount as you go along.   

Need help?  Drop me a line at rightwords@ida.net. Let's talk about making your "donate here" button really pay off.

What kind of help do you need?

Does your nonprofit need help? More important, do you know what kind of help you need?

Hint - It might not be a grant.

A quick confession.  I backed into being a consultant/startup adviser from being primarily a grant writer that specialized in newer nonprofits.

Why?

Because too many of my clients were so unprepared to ask anyone for money.

I found myself spending a lot more of my time getting clients to the point that they could meet the grantor's requirements than actually writing the proposal.

These were clients that had been in business for a while (the minimum time in business for me to consider a grant writing client is two years) but just weren't moving forward.

Some of them had no coherent program strategy. Some had no overarching fundraising strategy.

Some didn't even have budgets, organizational or program.  Without a budget, you can't define a fundraising goal. And those are just three of a long list of problems that had to be solved or managed before I could even look for grantors that matched up with my clients.

I even wrote a nice little free handout called "Why you can't survive on grants."  Lots of people requested it, few agreed with it.

I remember one person who got the handout and then wrote me a scathing email that read in part,  "Listen, nonprofits CAN'T survive without grants. Why do you think they started anyway?  It was to get people with money to stop being so selfish and put their money to work for good."

With all due respect, if that's your reason for starting a nonprofit, I can't help you.

Another problem is what I call the "someone else has to do the dirty work" philosophy.

Some clients don't want the tools to succeed. They want to order a ready-made nonprofit and have it shipped to their door.

For instance there was the client that had no budgets of any kind because they had no idea what anything cost to produce. When a grant asked for the cost per meal of their supplemental feeding program, they told me to "figure it out and let us know."

Uh, that's not how it works. Those are figures you should already have on hand for any grant writer. I offered to show them how to arrive at the figures and they terminated the grant writing contract because I "refused to compile requested information."

I think they had me confused with their chief operating officer.

Incidentally, neither of these two are still in business.

Only you know what areas aren't working for you. Is it volunteer and/or employee retention? Funding insufficient to accomplish your mission? Perhaps the board and the CEO/ED aren't on the same page? Has increased need outstripped your level of development? Applying for lots of grants but seldom or never landing any?

Whatever it is, it's usually not because you are having trouble getting or need a grant. That's ordinarily a symptom, not a cause.

Think of it like a broken down car. You know the car isn't running, but someone has to lift the hood and replace the right part to fix it.

The nice thing is, most of the time the real problems can be remedied. In terms of your time, commitment and yes, money, the solutions aren't free,  but they do exist.

What isn't working for you?

Drop me a line and let me know.  Let's see if we can fix it. 

Why didn't you get the grant?

You've poured your heart and soul and maybe money into creating the perfect grant proposal.

After waiting weeks or maybe even months, you either get a Dear John letter saying thanks for applying, or you go to the grantor's website and you are definitely not on their list of funded proposals.

Even worse, you may not get any feedback at all

Your first (printable) reaction is "what did I (we) do wrong?"

Maybe nothing. Statistics show that there are often as many as 100 applications for each round of funding awarded, and that brings the laws of supply and demand into play.

In that case, your carefully crafted proposal just got lost in the crowd.

That's not to say that your proposal is always perfect.  I get a few requests to review and/or "punch up" proposals every month and some of them …well, let's just say some of them need a lot of help. Perhaps they don't have any tangible results to report, or there are grammatical or logic errors, or their program didn't really fit the grantor's mission very well.

But some are stellar. No, really, there is absolutely nothing to fix.

That's the most frustrating part of proposal submissions.  Perfect isn't always good enough.

In that case, it really isn't you, it's them.  Here is a short list that explains how that happens.

1.  The grantee was pre-selected. They already knew who was going to win before you ever wrote the first line.  That happens when the grantor's bylaws or guidelines require a minimum number of applicants.

2.  They ran out of money.  I actually know of a foundation that had so many good proposals that they assigned each a number and picked the winners out of a hat.

3. They were looking for an intangible quality that they didn't include in the guidelines. I call that the "I'll know the perfect house when I see it" effect.

4.  Too many applications, and they just didn't have the time or inclination to evaluate every proposal thoroughly.

5. Fear of the unknown.  Grantors may have had a long-standing relationship with just a few nonprofits and the award committee might be afraid to try something new.

In some cases, you may get a letter that invites you to try again. I always suggest that you update the necessary areas (results, other supporters, etc.) and give it another chance. The next time you may be top-of-mind because of your previous submissions.

If the grantor is located close to you, do a little more in-depth research.  Check out the principals to see what sort of organizations they belong to or whether they may circulate in the same social circles that you frequent.

In fact, I usually recommend that you try at least three times. Things and people change and it would be a shame to fail to even try.

Also, it never hurts to check out the competition, assuming you know who got the grant. Sometimes there are subtle (and they can be very subtle) clues you can use to tweak your proposal next time.

In one case,  I noticed that all the grantees selected were within just a few miles of the grantor's headquarters. My client was over 50 miles away, although still within the geographical zone of the guidelines. The next time they applied they addressed the distance factor in a positive manner and were awarded a piece of the pie.

Although it seldom bears fruit, it can't hurt to ask why you were not successful.  Sometimes you will get an answer. Bear in mind, some grantors will say right in the guidelines that they don't give feedback.  In that case, save your breath and time.

You should always write the best grant application possible, but if it doesn't work out, don't get so discouraged that you quit trying.

If you would like a review of or assistance with a proposal, you can reach me here.