Tuesday, August 26, 2014

Promoting your nonprofit

Unlike a famous movie line, just because you build it doesn't mean they will come. "They" being the donors you need to attract to actually make your nonprofit dream a reality.

Just like any other small business, you need to convince people you may not even know to spend money to support you, or rather, your mission. So, how do you do that? Especially when as a new charity, you can't qualify for most grants?

You must have a webpage, but you still need people to visit it. How do you drive traffic to your site and hopefully to your "Donate Now" button?

Well, you could advertise, but advertising costs money, sometimes a lot of money. Even a business card size ad in your local paper or a 30-second spot on your local TV station can cost you a few thousand dollars a year. However, many media outlets have public service requirements to fill, so traditional advertising is still possible.

Of course there is always social media. Lots of nonprofits have Facebook pages, but they don't typically generate many dollars, and they don't attract many new faces. Facebookers are generally talking to people who already know them. On the other hand, those people also know people that they can bring to your cause.

Twitter can be a way to attract new blood, provided you understand that the response will be to "hashtag-their interests." If they don't know you, then a key phrase that targets their interest will be far more effective than "hashtag-your charity's name."

Then there is the oft-dreaded personal interaction. Speaking at meetings, attending stuffy events, or even volunteering creates personal connections. While it isn't quite the same as door-to-door sales, sometimes it feels that way.

The point of all advertising to reach people. People are the conduit to the funding that supports  your nonprofit.

To that end, try all of these strategies. Some will work better than others, and then you can refine your campaign. But you can't succeed without reaching out, no matter how awesome your mission statement sounds.

One emerging form of fundraising is crowdfunding. As it becomes more well-known, a lot of nonprofits are posting on sites like Kickstarter, Indiegogo or StartSomeGood.com and a lot of them are not meeting their goals.

The one thing that all of these sites require is that you have a network or nucleus of supporters. People aren't logging on to their computers every morning and typing "find an awesome nonprofit I can donate to". You have to have people that will not only start the ball rolling by donating, but reach out to their friends and direct them to your campaign.

Start developing your PR strategy now, build your network, and the funding end of things will become a lot simpler. Need more information?  Email me at rightwords@ida.net and we'll talk!

Wednesday, August 20, 2014

Evaluating the charity evaluators

As any nonprofit client or prospective client who has worked with me can tell you, I am committed to nonprofits providing documented proof of legitimacy to donors.

I don't work with or support scammy appeals or organizations, and I qualify my clients on many of the same criteria that donors use. Why? Because if they can't meet minimum reporting  requirements, they aren't going to find funding. I do a lot of research to ascertain if they have a shot at succeeding with their funding plans.

Unfortunately, some of the research resources available to me don't cover most of the clients I serve.
I'm talking about the so-called charity rating or evaluation sites/organizations. Most of these organizations do not rate any charity that files anything other than the 990. They don't accept audited financial statements, annual reports, 990EZ's and certainly not the 990N, the so-called postcard.

In effect, that means that if your revenues aren't already well above six and even seven figures, you aren't going to get rated.

For instance, one of the best known and most highly respected evaluation organizations is Charity Navigator (CN). I use them where applicable, and I support their mission to bring transparency to the world of charitable giving, so I definitely don't have an axe to grind with them. And you can access information about some smaller charities, you just can't get a rating for them.

CN's rating criteria is an excellent example of the shortcomings of the methods used to rate public charities. They don't rate every public charity, not even close to it. They rate about 7500 charities as of July 2014, according to their own reporting. The National Center for Charitable Statistics (NCCS) lists over 1 million 501(c)(3) IRS-approved organizations in the U.S. as of 2010.

You can't even get a rating from these ratings organizations unless your nonprofit meets certain criteria.  For example, on CN's website they list this information relative to qualifying revenue dollar amounts and length of time in business required to receive a rating:

"We do not evaluate organizations that file the Form 990-EZ. The Form 990-EZ requires less financial reporting than the Form 990, and as such, we would lack important data needed in our analysis.

Sources of Revenue:  Because our goal is to help individual givers, we evaluate only those charities that depend on support from individual givers. Specifically, we require public support to be more than $500,000 and total revenue more $1,000,000 in the most recent fiscal year. And we do not review charities that receive most of their funding from government grants, or from the fees they charge for their programs and services.
Length of Operations: We require 7 years of Forms 990 to complete an evaluation."

In theory, I don't have a problem with revenue or time in business being used as qualifiers. The 990 is a legal document that implies that the data is certifiably reliable, and that's a good thing. It's not only the criteria that the rating sites use, it's the criteria used by both grantors and individual donors as well.

Substantial existing revenue and longevity certainly impact the effectiveness and scalability of programs, so I understand why it is important to both rating organizations and grantors or donors. It's good in theory, as far as it goes.

When theory meets reality

Between theory and practice there often exists a wide gulf. In practice, these ratings almost guarantee that substantial funding for smaller nonprofits is, if not nonexistent, certainly drastically curtailed.

Again, it isn't the concept of ratings I oppose. Anything that protects donors from the all-to-prevalent con artists using charity as a cover story is a good idea. But it allows for some serious gaps that put both smaller nonprofits and the general public at risk.

As someone who works with both start-up and small but established nonprofit clients, I can attest that concept doesn't serve to maximize diversity in problem solving.

In general, small nonprofits aren't particularly attractive grantee prospects until they have been around for awhile. Typically about three years is the point at which they are somewhat stable and have results to display. That still leaves a big gap between three and seven years, at precisely the point where the nonprofit needs to be actively growing.

Obviously, these rating favor larger charities. But is larger always better?

Large organizations tend to be cumbersome for front line staff working at the grassroots level. There are so many layers of bureaucracy to penetrate that some of the best solutions to problems never make their way into the communities or demographic that the parent organization purports to serve.

Still, size does matter. The larger the organization, the larger the revenue line gets and that supposedly equates to greater effectiveness. For charities working at the local level, that simply isn't true. In a way, when we only donate to the big, visible and well funded charities, we may in fact be perpetuating rather than solving problems.

At the same time, we want to know that the money we donate isn't going to pay for a fancy car or a private island in the Bahamas for the CEO or the charity founder. The only somewhat objective way we have to assess legitimacy is through the rating organizations. It's a vicious cycle. You can't get rated without money, and you can't get money without being rated.

Why should we care about some little grassroots charity?

All industries need new ideas and fresh approaches. The communications industry did not develop the personal computer, the shoe-box sized mobile phone or the smartphone. They exist because someone saw a need to approach old problems in new ways. Every big company was once a small company.

Not every charity should survive, any more than any other small business should survive. Be that as it may, there is a huge gap between 7500 and 1,000,000-plus. Somewhere in that gap there are good small organizations with the potential to become much greater forces for good.

If not this way, then how?

There has to be a better way to evaluate start-ups and smaller organizations for effectiveness than just their revenue.

When revenue is the main criteria for even selecting a charity for review, it does a disservice to everyone.

If a small or newer charity is taking in $50,000 and growing that figure by 10% Y-O-Y and achieving maximum impact with that money,  it may very well have discovered or implemented an approach that can be repeated elsewhere if it can expand. It can't build capacity without more money, and it can't get more money if prospective donors can't research it. Capacity building grants are usually not something that are awarded without considerable research by the grantor and most of them start with the ratings organizations.

 Instead of growing, many of these smaller NPO's struggle at the same level year after year, never realizing their full potential. They can't hire better, more effective staff or attract capital because from a ratings standpoint they simply don't exist.

If the goal of charity evaluators is only to keep existing organizations in business and stifle competition for already scarce support dollars they do a very good job. If they exist to help donors make informed decisions about supporting new blood and better ways to solve problems, I rate them at less than one star.

What's the answer?

There has to be a way for these evaluators to include a "small organization" component.
Perhaps they could reduce or eliminate the revenue requirement in favor of an effectiveness rating for smaller organizations.

Smaller nonprofits could receive a rating like "effectiveness increasing, effectiveness adequate or insufficient effectiveness". The financial reporting might be accomplished by accepting audited or accountant's reviewed financials or annual reports together with the 990EZ. Or even put them on a progress watch list. If they continue to report stable performance for a period of time, they could receive a "OK to donate" stamp.

What are your thoughts on the matter?

Tuesday, August 12, 2014

Hello? Is anyone in charge here?

As a grant and proposal writer, I find myself asking that question a lot, and too often the answer is no.

Oh sure, there may be someone assigned to answer questions or provide data, but no one seems to be able to make a firm decision. In fact, it happens so often that it has become one of my top questions when qualifying a client…what is your approval process for accepting a grant application or LOI deliverable? The least desirable answer is that it will be "reviewed by the staff and/or board".

The bane of any grant writer's existence is the serial editing process. That means you submit a proposal or LOI for review and it makes the rounds throughout the organization not once but many times.

You know you are in trouble when you get back multiple edit requests signed by six different people and they target six different goals.

What you have then is six different people all defending their piece of the turf. That doesn't move the process forward, and it may indicate to the grantor that your planning process is not effective as a means to provide long-lasting outcomes.

Understand, I don't have a problem with the people or the input. It's the lack of coherent planning that serial editing represents.

With rare exception, grantors focus on supporting a proposal that targets one of their must-have results. Let's say  they are into acquiring housing for the homeless. They are looking for ways to assist you in putting that roof over someone's head.

While many conditions contribute to homelessness, the grantor's ultimate goal is reducing the number of homeless people. However, in your organizations serial editing process, one person wants to include funding for substance abuse counseling, another wants to provide job training, another wants to address domestic violence, while someone else is focused on acquiring properties for temporary housing.

Only the last will meet the goal of this specific grantor. That doesn't mean the other three are not worthy of funding, or couldn't be presented as individual programs or phases, but they don't provide the physical roof.

Someone needs to be in charge of maintaining a focus and assigning a priority to the specific needs that align with both the grantor and grantee's mission.

In the example above, the physical building meets the grantors guidelines. All of the other peripheral elements can be targeted once the person is safely housed. That might require writing more grants and applying to several grantors.

It very seldom happens that one grantor will support every facet or nuance of fulfilling your over-arching mission. As a grant writer or adviser, it isn't up to me to  prioritize your needs. The best I can do is make suggestions that will strengthen your chances of winning funding.

The decision on whose interests or needs are most important within your organization at any given point in time needs to made before you approach a funding prospect. Then, when you review an RFP or a proposal one person should be able to make a decision and evaluate the proposal or grantor on that basis.

That saves you time and money by allowing me to provide you with a quality targeted proposal or assist you in finding appropriate grantor prospects to approach, and more importantly, it maximizes your chances of winning funding.

Make a plan and put someone in charge of it.  It will make both of our jobs easier and more productive. 

Monday, August 4, 2014

Evaluating proposal requests

Twice in the last few months prospective clients have asked to have a proposal prepared to answer a request for a bid or apply for a grant. Neither RFP fit the client.

How do you know whether a proposal is a good fit? It's kind of like evaluating whether a date is a potential spouse. Either the chemistry is there or it isn't.

That's not to say that every request must match what you offer 100%. If your date meets every other criteria, would you break up with them just because of hair color or height?  Probably not, unless that was the most important feature on your list.

When you see that RFP, ask yourself if you can meet the  important requirements. For instance, one of the aforementioned clients was a nonprofit responding to a request for proposals regarding a service for low-income mothers. The client's program aligned very closely with the grant parameters, except for one thing. The grantor only funded nonprofits in a specific state, and it wasn't even close to where the client was located.

Even just a cursory look at the grantor's previous award history showed they had never funded anything outside of their geographic area. Nevertheless, the client was absolutely sure that when the grantor read their wonderful proposal, they would break that pattern.

It was never going to work. The grantor was a family foundation with specific ties to a specific state, and they clearly said that their geographic criteria was set in stone. The nonprofit didn't recognize the importance of their location as a deal-breaker.

I politely declined to write the proposal, citing geographic mismatch, eventually found them a grant they could qualify for and wrote that proposal instead.

The other RFP was for a specific type of cleaning service. There were a couple of things that the client didn't currently offer, but they were fairly minor, i.e. they didn't offer floor buffing and didn't have a floor buffer, but other than that, they matched up pretty well. We researched what it would cost to buy or rent a buffer and how long it would take to train someone to use it, fired off the proposal, and it was accepted.

Both of these examples are pretty straightforward. It isn't always that obvious, but the principle is the same. Firing off a proposal just because you can isn't always the right strategy and it could waste a lot of time and money.

It isn't necessary to look for the perfect RFP, but you need to be able to differentiate between what's possible and what isn't. If you can adapt your circumstances reasonably easily to the grantor's requirements, then go for it.

Don't get blinded by a big award or a fat, juicy contract and then find out it won't work out. If you need the money or the job within three months, and the grant or contract won't be awarded for six months, then maybe it isn't going to work for you. Perform a thorough evaluation first.

If you don't know how to evaluate a RFQ or RFP, let me know. I'd be happy to help, either by teaching you what to look for or performing the research. Either way, look before you leap!