Weird title? It seems
that all nonprofits need money, all the time. Let me explain. I am often
approached by nonprofits that just can't seem to come up with a credible reason
for the ask. These are often either organizations receiving a major portion of
their funding from government funding or major gifts. They are unable to
present a program that is clearly an unfunded addition to their program lineup.
Take nonprofit A. They received a three-year Federal grant
focused on after-school care that literally financed the whole program, as
designed. It even paid for salaries and most of the overhead. They wanted to
secure private funding to continue the program after the Federal funds were
exhausted. They approached most of the major players in the early childhood development
field, but were repeatedly passed over for funding.
On the surface, their plan for program continuation seems
sound. They wanted to diversify their funding streams so that they wouldn't
have to shut the program down when the government grant ran out. The problem was
that they didn't have a need, in the eyes of prospective grantors. At an on-site
meeting with one of the foundations,
they kept having to answer the question, "what is our money going to fund
at this time?" Ultimately the grant was denied with a comment that
basically stated the title of this post. Their statement of need (program
continuation) was too far in the future to interest the foundation.
Nonprofit B received a major restricted bequest in the form
of both cash and stocks to support an environmental program to purchase land
for a wildlife habitat. After a period of time all the land available in the
nearby area had been purchased, but the reclamation costs and maintenance were
not covered by the bequest. When the NPO went back to the executors for
permission to modify the terms to use the money for those needs, it was denied
on the grounds that Granny wanted them to continue to purchase land, period. If
they couldn't use it for that, the funding would revert back to the heirs. The
NPO began to solicit funding to replace the bequest but again ran into the
problem that on paper they had all the money they needed, and more. Not wanting
to tick off the estate, they were not indicating that they would lose the
funding if they failed to use it to purchase land. The upshot of that was, most
prospective funders decided that they didn't need more money. This is a perfect
example of poor planning when accepting major gifts but that's a story for
another time.
The moral here is that you have to show an unmet need. Whether you are in the position
of having good funding at the present or you are a struggling start-up, if you
can't show a need, grantors are going to ignore you. Most funding supports a
program. If that program is already fully funded, you will probably be faced
with the unenviable task of creating either an adjunct program that is
unfunded, or having to shut down the original program when the current funding
runs out.
Many foundations operate on the principle that they want to
help by spreading the wealth over a wide variety of nonprofits. Most
foundations will not allow repeated grants to the same organization, and most
do not even offer short-term multi-year funding. That philosophy is what keeps
nonprofits in the never-ending cycle of chasing funds, and dooms many good
programs to failure. While I certainly would like to see the whole giving
philosophy change to provide long term sustainable funding to a few truly effective
organizations instead of spreading the wealth to many partially effective ones (and
I could write several thousand words on that subject, pro and con), the reality
is that if you can't show need, you aren't going to get funded. Your ongoing programs
must either identify a new area of concern, or expand into unfunded areas of
your original proposal.
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